Stella Contracts to Purchase Wilma's Horse, Running Cloud, for $10,000

question 34

True/False

Stella contracts to purchase Wilma's horse, Running Cloud, for $10,000. The horse dies soon after the contract is signed, but prior to Stella taking possession of the horse. Stella is still obligated to pay for the horse.

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Definitions:

Negotiable Instrument

A paper that promises to pay a certain sum of money, which can be demanded at any time or paid at an agreed moment, and identifies the individual responsible for the payment.

Presentment

The act of making a demand for the drawee to pay.

Dishonored

refers to a financial instrument, like a check, being refused by the bank upon presentation for payment due to insufficient funds or other reasons.

Endorses

The act of signing the back of a check or any other document, which signifies agreement, approval, or endorsement of its contents.