April 21 Notes

April 21 Notes - Negotiable Instruments- A written document...

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Negotiable Instruments- A written document signed by the marker or drawer of the instrument, setting forth the signers unconditional promise or order to pay a fixed amount of money (with or without interest in a specified amount or at a specified rate) on demand or at an exact future time to a specific person, or to order, or to the instrument’s bearer. Types of Negotiable Instruments Draft- An unconditional order to pay (ex: a bank check) by which the party creating the draft (the drawer) orders another party (the drawee), typically a bank, to pay money to a third party(the payee). Time Draft- Draft that’s payable at a certain time. Sight Draft- A draft payable on presentment. Acceptance- A drawee’s written promise to pay the draft when it comes due. Trade Acceptance- A draft that is drawn by seller of goods ordering the buyer to pay a specified sume of money to the seller, usually at a specified future time. The buyer accepts the draft by signing and retuning it to the seller. Promissory Note- A written promise made by one person (the maker) to pay a fixed sum of money to another person (the payee) on demand or at a specified future time. Certificate of Deposit- A note by which a bank or similar financial institution acknowledges that they have received money from you and promises to repay the money, plus interest, to the party or party’s designee, on a certain date. Transfer of Instruments Assignments- Under general contract principles, a negotiable instrument may be transferred to an assignee, which then holds the instrument with all the rights of the assignor. Negotiation- Transfer of an instrument in such a form that the transferee becomes a holder, who has at
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April 21 Notes - Negotiable Instruments- A written document...

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