blaw study guide2 - Requirements for Negotiability-must...

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Requirements for Negotiability-must have all 6 1. in writing 2. signed by the maker or drawer 3. unconditional promise or order to pay 4. sum certain in money a. amount must be on face of note b. what is money? 5. it must be payable on demand or at a definite time a. checks are demand payments b. promissory notes- definite time c. can’t say will pay when cubs win-not definite time-fails test d. a time draft -payable 20 days after presentment-clock starts now i. clock can start following a well known event-pay 30 days after job 6. it must be payable to Order of Bearer a. magic words=”pay to the order of” i. means specific person gets money b. acceleration clause-accelerating the debt c. order instruments-the person who is named to be paid d. bearer instruments Bearer Paper-all pass test 1. payable to order of bearer 2. payable to Cindy Crawford or Bearer 3. Payable to Bearer 4. Pay cash 5. Pay to the Order of Cash Factors not affecting negotiability -no date (except when necessary to determine a definite time for payment) -payment is due 30 days after date on check -post dating or antedating -states interest is to accrue, but no rate is started use government judgment rate Other Negotiability Issues -handwritten terms prevail over typed -typewritten terms prevail over pre-printed -words over numbers (ten dollars over $10.00) Transferring Instruments -Negotiable Instrument (NI) may be transferred by -assignment -transfer of rights under a contract -whatever right you have they will get -assignee takes only the rights of the assignor
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-defenses against the assignor may be raised against the assignee -negotiation -the transfer of a NI when the transferee becomes a holder -transferee takes at least the rights of his transferor -no negotiation of a nonnegotiable instrument -if not negotiation it is an assignment
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This note was uploaded on 04/28/2008 for the course B LAW 444 taught by Professor Sharp,jeffm during the Fall '06 term at Pennsylvania State University, University Park.

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blaw study guide2 - Requirements for Negotiability-must...

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