A. The following is a promissory note Cary gave to Friendly. June 12, 2020 I promise to pay Friendly Hardware Co. or bearer $900.00
With interest thereon at 12% per annum.

Signed: S.J. Cary
Maker
Reference: Sale of Lathe, Invoice # 6734

On June 15, 2020, Friendly delivered Cary’s promissory note, without endorsement, to Queen Bank in exchange for $750.00. Queen, a holder in due course, was unaware that Cary had advised Friendly that the lathe was not operating properly and that Cary had no intention of paying the note. Queen then delivered the note to Abcor Factors Inc. in exchange for $800. At the time Abcor acquired the note from Queen, it knew that Cary disputed any obligation under the note because the lathe was not working properly. Abcor has demanded that Cary pay the note given to Friendly, but Cary has refused to do so.
Cary refuses to honor the note held by Abcor, claiming that:
a. It is nonnegotiable because it is not payable at a definite time and it references the sales invoice.
b. Abcor has no rights under the note because it was not endorsed by Friendly.
c. Abcor was aware of Cary’s claim that the lathe was not working properly and, therefore, took the note subject to that claim.

Answer rating: 100% (QA)

Step 11 a It is possible that the promissory note given by Cary to Friendly may be considered nonneg... View the full answer