3. (TCO E, H) Determine whether the following instrument is a negotiable instrument, addressing all the requirements of negotiability in your response.
I, James Wyatt, promise to pay $12,000 to Buck’s Bikes in four equal installments of principal, beginning on January 1, 2011, and on the same day in each of the next three years. Each payment will consist of $3,000 in principal,
plus interest accrued since the date of this note, in the case of the first payment, or since the prior payment in the case of all other payments. Interest shall accrue at the rate of 4% per annum, or in the event of default, at the maximum rate allowed by law until the default is cured. This note is secured by collateral consisting of various machines. This note may be paid in whole or in part prior to the due dates, and the interest accrued will be reduced accordingly. The due date for any payment under this note may be extended by mutual agreement of the parties up to six months from the due date as stated herein. The proceeds of this note will be used by James Wyatt to further his experiments, and in the event those experiments are unsuccessful, the payment obligation is canceled. (Points : 50)