Question

True or false

1. Sally writes a check "Bill and Tom". Both Bill and Tom must indorse that check for it to be negotiable.

2. ABC, Inc. sues Tess, its tenant, for unpaid rent. Tess withheld rental payments because ABC failed to rid her apartment of cockroaches. Tess cannot countersue ABC because she should have filed a lawsuit againt ABC first.

3. All offers to purchase real estate must be in writing in order to be binding.

4. Instruments that are payable on demand are called order instruments.

5. When the name of the payee on an instrument is misspelled, the endorsement becomes invalid.

6. Laura Dern received a check from UMB. She indorsed the check as follows: "for deposit only, /s/ Laura Dern". Laura's indorsement is: Ted and Ginger are friends and they decide to buy real estate together.

7. Ted owns 60% of the property and Ginger owns 40%. They are tenants in common.

8. A will can be created to come into effect during one's lifetime.

9. In a sublease, there is no legal relationship between the landlord and the sublessee.

10. Mandy signs her name with the symbol . . Mandy can use this symbol to sign a negotiable instrument and it is legal.

11. Sally writes a check "Bill and Tom". Both Bill and Tom must indorse that check for it to be negotiable.

Answer 1

1. Sally writes a check "Bill and Tom". Both Bill and Tom must indorse that check for it to be negotiable.

Answer: True.

Reason: When a check is made out to two or more people, the wordings "and" or "or" determine whether both parties need to sign (and is used) or if either party can sign (when or is used). In this case since the cheque is made out to Bill and Tom, both must sign in order to endorse it.

2. ABC, Inc. sues Tess, its tenant, for unpaid rent. Tess withheld rental payments because ABC failed to rid her apartment of cockroaches. Tess cannot countersue ABC because she should have filed a lawsuit againt ABC first.

Answer: False

Reason: As long as your claim has been filed within the statute of limitations, a tenant can counter-sue ABC. However, in this case, since ABC has sued Tess for unpaid rent first, Tess would be required to deposit the rent money with the court before counter-suing the claim.

3. All offers to purchase real estate must be in writing in order to be binding.

Answer: False

Reason: An offer can be made in writing or verbally. However, all CONTRACTS to purchase real estate must be in writing in order to be binding.

4. Instruments that are payable on demand are called order instruments.

Answer: False.

Reason: An order instrument is a negotiable instrument which is payable to a specified person or assignee only.

5. When the name of the payee on an instrument is misspelled, the endorsement becomes invalid.

Answer: False

Reason: When the name of the payee on an instrument is misspelled, the Payee may endorse the instrument in the incorrect name, in the correct name or in both.

6 & 7 - Please provide clarification if they are part of the same question. I'll be happy to answer it in the comments section of the question once you provide some claity.

8. A will can be created to come into effect during one's lifetime.

Answer: False

Reason: A will can be created at any time during your life to come into effect upon your death. It cannot come into effect during your lifetime.

9. In a sublease, there is no legal relationship between the landlord and the sublessee.

Answer: True

Reason: In this case, the relationship between the landlord and the lessee stays intact while a new legal relation is formed between the sublessee and the lessee. There is no legal relation between the landlord and the sublessee.

10. Mandy signs her name with the symbol . . Mandy can use this symbol to sign a negotiable instrument and it is legal.

Answer: True

Reason: The legal basis of negotiable instruments is the signature of the writer of the instrument. Thus, Mandy can sign the instrument by affixing any symbol which she intends to be a representation of her signature and it would be legal.

11.  Sally writes a check "Bill and Tom". Both Bill and Tom must indorse that check for it to be negotiable.

Answer: True.

Reason: When a check is made out to two or more people, the wordings "and" or "or" determine whether both parties need to sign (and is used) or if either party can sign (when or is used). In this case since the cheque is made out to Bill and Tom, both must sign in order to endorse it.

Feel free to leave any doubts in the comments section and I'll be glad to help you with it!