Asked by Alicia Lankford on Jun 01, 2024
Verified
Oda signs a promissory note payable to the order of Payday Loan Company. The note states that it is payable "with interest at the legal rate." This note is
A) negotiable.
B) nonnegotiable, because it does not state a specific rate of interest.
C) nonnegotiable, because it is a promissory note.
D) nonnegotiable, because it is payable only with interest.
Negotiable
Pertain to something that is open to discussion or modification, especially concerning terms of an agreement or contract.
Legal Rate
The interest rate established by law that can be charged for borrowing money or the rate at which interest can be paid on a legal judgment.
Specific Rate
A particular or fixed rate that applies to a specific condition or circumstance, often used in finance and taxation.
- Gain insight into the crucial qualities that establish an instrument's negotiability.
- Clarify the importance of established and determinable sums within the realm of negotiable instruments.
Verified Answer
ZK
Zybrea KnightJun 03, 2024
Final Answer :
A
Explanation :
The note is negotiable because it meets the requirements for negotiability, including a definite promise to pay. The reference to "interest at the legal rate" is sufficient to determine the interest rate, making the note's terms definite and not affecting its negotiability.
Learning Objectives
- Gain insight into the crucial qualities that establish an instrument's negotiability.
- Clarify the importance of established and determinable sums within the realm of negotiable instruments.