Which of the following is correct with respect to the fixed amount requirement of negotiability under Revised Article 3?
A) The fixed amount requirement applies only to the principal.
B) Interest may be stated in an instrument as a fixed or variable amount of money or it may be expressed as a fixed or variable rate or rates.
C) A sum certain may be payable in installments or with a fixed discount if paid before maturity.
D) All of these are correct.

Question

Quizplus · Accepted Answer

All of the options are correct with respect to the fixed amount requirement of negotiability under Revised Article 3.

A) The fixed amount requirement applies not only to the principal but also to any interest or fees payable on the instrument.

B) Interest may be stated in various ways, but it must still be a fixed or determinable amount or rate, otherwise the instrument will not be negotiable.

C) A sum certain may be payable in installments, but each installment must be for a fixed or determinable amount, and the total amount payable must be a fixed and definite sum. Additionally, any discount for early payment must be a fixed amount or percentage of the principal, and must be clearly stated in the instrument.

Therefore, option D is the correct answer.

Which of the Following Is Correct with Respect to the Fixed