LNG LLC and Mainline Corporation enter a contract for a sale of liquefied natural gas. LNG draws a draft unconditionally ordering Mainline to pay $50,000 to LNG's order in sixty days. Mainline signs and dates the draft. LNG can sell the draft to
A)Mainline only.
B)LNG's bank only.
C)any party after the draft has been paid.
D)any party before payment is due.

Question

Quizplus · Accepted Answer

LNG can sell the draft to any party before payment is due because the draft is a negotiable instrument, which means it can be transferred to another party who can then claim the right to payment.

LNG LLC and Mainline Corporation Enter a Contract for a Sale