If an instrument fails to qualify as a negotiable instrument, which of the following statements is true?
A) The instrument by definition fails to be a good contract.
B) Failure to qualify as a negotiable instrument does not mean the instrument fails to be a good contract.
C) The instrument by definition is a good contract.
D) The instrument by definition is a good contract only if it is made out in an amount less than $1,000.
E) The instrument by definition is a good contract only if it is made out in an amount more than $1,000.

Question

Quizplus · Accepted Answer

Failure to qualify as a negotiable instrument does not automatically mean the instrument fails to be a good contract. The criteria for being a negotiable instrument are specific and distinct from the criteria for a contract to be valid and enforceable.

If an Instrument Fails to Qualify as a Negotiable Instrument