BLAW TEST 2 WITH VERIFIED
QUESTIONS AND ANSWERS [GRADED
A+]
Requirements for Negotiability - ✔✔1. Be in writing
2. Be signed by the maker or the drawer
3. Be an unconditional promise or order to pay order or bearer
4. State a fixed amount of money (sum certain)
5. Be payable on demand or at a definite time
5 types of Indorsements - ✔✔1. Blank
2. Special
3. Qualified
4. Restrictive
5. Combo
5 Warranties - ✔✔1. No forgeries
©morren2026/2027.Year published 2026.
, 2. No material alteration
3. No insolvency
4. No claims or Defenses
5. Entitles to get Paid
Universal (Real) Defenses - ✔✔*Valid against all holders, including
holders in due course
1. Forged signatures
2. Material alteration
3. Discharge in bankruptcy
4. Fraud in the execution
5. Judicial Insansity/court order
Personal (Limited) Defenses - ✔✔*Valid against ordinary holders but not
against holders in due course
1. Lack or failure of consideration
2. Breach of contract (including breach of contract warranties)
3. Wrongful completion: Unauthorized completion of an incomplete
instrument and nondelivery of the instrument
4. Duplicate payment: Previous payment or cancellation of the instrument
©morren2026/2027.Year published 2026.
QUESTIONS AND ANSWERS [GRADED
A+]
Requirements for Negotiability - ✔✔1. Be in writing
2. Be signed by the maker or the drawer
3. Be an unconditional promise or order to pay order or bearer
4. State a fixed amount of money (sum certain)
5. Be payable on demand or at a definite time
5 types of Indorsements - ✔✔1. Blank
2. Special
3. Qualified
4. Restrictive
5. Combo
5 Warranties - ✔✔1. No forgeries
©morren2026/2027.Year published 2026.
, 2. No material alteration
3. No insolvency
4. No claims or Defenses
5. Entitles to get Paid
Universal (Real) Defenses - ✔✔*Valid against all holders, including
holders in due course
1. Forged signatures
2. Material alteration
3. Discharge in bankruptcy
4. Fraud in the execution
5. Judicial Insansity/court order
Personal (Limited) Defenses - ✔✔*Valid against ordinary holders but not
against holders in due course
1. Lack or failure of consideration
2. Breach of contract (including breach of contract warranties)
3. Wrongful completion: Unauthorized completion of an incomplete
instrument and nondelivery of the instrument
4. Duplicate payment: Previous payment or cancellation of the instrument
©morren2026/2027.Year published 2026.
