TP Sells Franchises in the Old Fast Food Chain

question 365

Multiple Choice

TP sells franchises in the Old Fast Food chain. TP sells a franchise to Choi for $100,000 by cashier's check. Choi then hears that TP is going out of business and tries to stop payment on the check. TP has already transferred the money to a third party who meets the UCC's requirements for a holder in due course. The bank paid that third party. TP declares it is out of business. In a subsequent lawsuit:

• A) the court will find that the third party is a holder in due course and, despite the fact that TP has defrauded Choi, not require the third party to repay Choi
• B) because of the fraud involved, the court will require the third party repay Choi
• C) because the instrument involved was a cashier's check and not an ordinary check, the court will not require the third party to repay Choi
• D) because the amount in controversy was more than $50,000, the courts will be empowered to view the fraud as a felony and will ignore the requirements of the UCC
• E) none of the other choices

---

Definitions:

Grantmakers

Organizations or individuals that provide financial support in the form of grants to nonprofits, educational institutions, or other entities for specific projects or purposes.

Sustainability

Sustainability involves meeting the needs of the present without compromising the ability of future generations to meet their own needs, often focusing on environmental preservation, social equity, and economic development.

Good Objective

A well-defined and achievable goal that guides actions and decisions in a specific direction for desired outcomes.

Specific

Clearly defined and precise, leaving little to no room for ambiguity or variability.