True/False
Indicate whether the sentence or statement is true
or false.
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1.
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An
instrument "payable to bearer" is transferable by assignment or by
negotiation.
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2.
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A
bearer instrument is negotiated by delivery alone.
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3.
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An
order instrument is negotiated by delivery alone.
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4.
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A
holder in due course (HDC) cannot acquire more rights in an instrument than its transferor
held.
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5.
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The
party that holds an instrument "payable to bearer" is entitled to present the instrument
for payment or to transfer it to another party.
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6.
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An
indorsement is required to negotiate an order instrument.
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7.
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A
blank indorsement can consist of a mere signature.
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8.
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A
restrictive indorsement requires an indorsee to comply with certain instructions regarding the funds
involved.
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9.
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An
instrument payable to two persons jointly requires the indorsement of only one of the payees for
negotiation.
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10.
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A
person who receives an instrument as a gift normally possesses the rights of an HDC.
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11.
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A
promise to give value in the future is normally sufficient to confer the rights of an HDC on one in
possession of a negotiable instrument.
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12.
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A
holder takes an instrument for value if he or she gives a check as payment for it.
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13.
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Good
faith, for purposes of UCC Article 3, is "honesty in fact and the observance of reasonable
commercial standards of fair dealing."
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14.
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For
an ordinary holder to become an HDC, the person from whom the holder acquired a negotiable instrument
must have acted in good faith.
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15.
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Acquiring a negotiable instrument after its maturity date may prevent a holder from
becoming an HDC.
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16.
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If a
note is payable on a legal holiday, then the payment of the note will be due on the next business
day.
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17.
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A
person who acquires a check stamped "insufficient funds" is put on notice and therefore
acquires HDC status.
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18.
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A
person who accepts an instrument that has been completed without knowing that it was incomplete when
originally issued cannot be an HDC.
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19.
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Knowledge of one defense does not preclude a person from asserting HDC status in
regard to all other defenses.
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20.
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The
shelter principle may apply to anyone who can trace his or her title back to an HDC.
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