Asked by
Sherry Yates
on Nov 27, 2024
Verified
Sport Souvenir LLC orders a gross of printed shirts from T-Shirt Company. To finance the purchase, the buyer signs a note to pay the seller from the funds paid to the buyer on the sale of the shirts at a certain event. This note is nonnegotiable because
A) the note is not a three-party instrument, such as a draft.
B) payment is to be made from a fund that does not yet exist.
C) the instrument does not contain an express promise to pay.
D) the note appears not to state a rate of interest.
Nonnegotiable
An item or condition that cannot be altered or discussed for change.
Three-Party Instrument
A financial document or contract involving three parties, where one party is typically promised payment by another, with the third acting as a guarantor or intermediary.
Payment Fund
A reserve of money that is set aside to cover future payments, debts, or expenses.
- Understand the influence of terms and conditions on the negotiability of a financial instrument.
Verified Answer
NS
Learning Objectives
- Understand the influence of terms and conditions on the negotiability of a financial instrument.
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