chapter 31 negotiable instruments quiz business law

Words and numbers conflict, words control  Waiving the benefit of any law intended forĮxists, general rules of interpretation apply:  An authorization to confess judgment or  Giving, maintaining, or protecting collateral  A instrument will remain negotiable if it Treated the document as if payable in theĪlternative: “The indorsement of any one of  An instrument payable “to bearer” or “toĬash” (bearer paper) may be negotiated orĪmbiguous and applied the default rule that Person or (2) an identified person or that Paper) if payable to (1) order of identified  An instrument is payable “to order” (order “demand” or “sight” or (2) does not stateĭefinite time” if payable at fixed date(s) orĪt time(s) readily ascertainable at the time  Conditional phrases destroy negotiability,Īcceleration does not destroy negotiabilityĭemand” if (1) it states it is payable on Unconditional promise or order to pay (e.g., Person that created the unauthorized item Interbank) bears the economic loss, but may sue the  A bank that pays an unauthorized check (e.g.,  Any writing (print, handwritten) or type of Payable on demand at a definite time, lack any Unconditional promise or order to pay a fixedĪmount of money, payable to order or to bearer, In writing, signed by the maker, containing an  For an instrument to be negotiable, it must be  A holder in due course takes the instrumentįree of all defenses and claims except those  Instrument bears no evidence of forgery or Instrument, paid value for it, acquired it in  A holder in due course has good title to the Must meet requirements for negotiability,Īnd (2) the person who acquires instrument  Thus, (1) the contract for payment of money Of transfer (assignment of commercial paperĬontract) so the instrument will be accepted  Purpose of negotiability is to decrease risk  Example: writing a bank check to pay a bill Pay a certain sum of money to the payee, to a  Specifically, the drawer orders the drawee to Person to a second person to pay money to a  A draft is an order (not a promise) by one  A certificate of deposit is an instrumentīank that it has received a deposit of moneyĪnd (2) a promise by the bank to repay the Interest) either on demand or at a specified, Writing to pay the payee, a person specifiedīy the payee, or the bearer of the note, a

Which the maker promises unconditionally in

 Promissory note: two-party instrument in Issued by banks are promises to pay money  Promissory notes and certificates of deposit  Two basic types of negotiable instruments: Title, investment securities) covered by other  Other negotiable documents (documents of  Transferred from party to party and acceptedĪs a money substitute payable immediately  Basically a contract for the payment of money  Commercial paper refers to checks, promissory

Chapter 31 negotiable instruments quiz business law