Yun writes an instrument that states it is "payable to Zho Ltd." In fact, "Zho Ltd." does not exist. The instrument is
A)negotiable.
B)nonnegotiable, because it does not state that it is payable to order.
C)nonnegotiable, because it is payable to a nonexistent organization.
D)nonnegotiable, because it cannot be transferred by indorsement.

Question

Quizplus · Accepted Answer

An instrument payable to a nonexistent organization is nonnegotiable because there is no real entity to receive payment or to endorse the instrument.

Yun Writes an Instrument That States It Is "Payable to Zho