Business Law Exam#4

Person who agrees to pay a draft

Paper so firmly attached to instrument as to be part of it.

Unauthorized change or completion of negotiable instruments to modify obligation of a party.

Check the drawee bank refuses to pay.

Check drawn by one bank on another.

Negotiable instrument payable to bearer.

Sealed, written contract obligation with essentials of note.

Act that indicates intention to destroy validity of an instrument.

Acknowledgement by bank of receipt of money with engagement to repay it.

Draft drawn on bank and payable on demand.

Note secured by personal property.

Bond with detachable individual coupons representing interest payments.

Presentment made, but acceptance or payment not made.

Written order by one person directing another to pay sum of money to third person.

Person ordered to pay draft.

Person who executes a draft.

A person in a relationship of trust and confidence

Person in possession of instruments payable to bearer or that person.

Holder for value and in good faith with no knowledge of dishonor, defenses, or claims, or that paper overdue; acquires rights superior to original owner.

Several defenses may be either universal or limited depending on the circumstances of a case.

• Duress* Obtaining consent by means of threat-Duress nullifies a contract the defense is universal.
• Incapacity other than Minority* The effect if the incapacity makes the instrument void.
• Illegality* Specifies that instruments Based on such transactions are unenforceable
• Alteration* Unauthorized change or completion of negotiable instrument to modify obligation of a party.

Signature of holder on back of instruments with any directions or limitations.

Payee or holder who signs back of instrument

Certain defenses are limited to being raise against ordinary holders and cannot be raised against holders in due course.

• • 1. ordinary contract defenses
  
  
  • 2. fraud that induced the execution of the
  • insturment
  
  
  • 3. conditional delivery
  
  
  • 4. impropercompletion
  
  
  • 5. payment or part payment
  
  
  • 6. nondelivery
  
  
  • 7. theft

Person who executes a note

Instrument issued by business indicating payee may recieve

Document of payment, such as a check.

The act of transferring ownership.

Negotiable instrument payable to order

party to whom instrument is payable.

The demand for acceptance made upon the maker.

Liability without conditions for negotiable instrument that is due.

Unconditional written promise to pay sum of money to another.

Bond payable to specific person, whose name is recorded by issuers.

Unilateral act of holder giving up rights in the instruments or against a party to it.

A claim by the party being sues against the party sueing

Draft drawn by sellerin purchaser of goods

• 1) Minority
• 2) Forgery
• 3) Fraud as to the nature of the instrument or its essential terms
• 4) Discharge in bankruptcy proceedings.

Check with voucher attached

• 1) Cashier's Check*Check drawn by bank on it's funds in bank
• 2)Certified Check* Check accepted by bank's writing "Certified" on it.
• 3) Stale Check* Check presented more than six months after its date

• 1) The instrument must be in writing and signed by the party executing it
• 2) The instrument must contain either an order to pay or a promise to pay
• 3) The order or the promise must be unconditional
• 4) The instrument must provide for the payment of a fixed amount of money
• 5) The instrument must be payable either on demand or at a fixed or definite time.
• 6) The instument must be payable to order of a payee or to bearer.
• 7) The payee ( unless the instrument is payable to bearer) and the drawee must be designated with resonable certainty.

• Inland Draft* Draft drawn and payable in the U.S.
• Foreign Draft* Draft drawn and payable outside the U.S.
• Sight Draft* Draft payable on presentation of the holder
• Time Draft* Draft payable a certain number of days or months after date or presentation.

• Blank Indorsement* Indorsement consisting of signature of indorser.
• Restrictive Indorsement* Indorsement that restricts use of instrument.
• Qualified Indorsement* Indorsement that limits liability of indorser.
• Special Indorsement* Indorsement that designates particular person to whom payment is to be made.