CHAPTER 27

CHAPTER 27 - Special Indorsement one identifying an...

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CHAPTER SUMMARY Negotiation Holder possessor of an instrument with all necessary indorsements Shelter Rule transferee gets rights of transferor Negotiation of Bearer Paper transferred by mere possession Negotiation of Order Paper transferred by possession and indorsement by all appropriate parties The Impostor Rule an indorsement of an impostor or of any other person in the name of the named payee is effective if the impostor has induced the maker or drawer to issue the instrument to him using the name of the payee The Fictitious Payee Rule an indorsement by any person in the name of the named payee is effective if an agent of the maker or drawer has supplied her with the name of the payee for fraudulent purposes Negotiations Subject to Rescission negotiation is valid even though a transaction is void or voidable Indorsement Definition signature (on the instrument) of a payee, drawee, accommodation party, or holder Mann CH 27- 1
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Blank Indorsement one specifying no indorsee and making the instrument bearer paper
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Unformatted text preview: Special Indorsement one identifying an indorsee to be paid and making the instrument order paper Unrestrictive Indorsement one that does not attempt to restrict the rights of the indorsee Restrictive Indorsement one attempting to limit the rights of the indorsee • Indorsements for Deposit or Collection effectively limit further negotiation to those consistent with the indorsement • Indorsements in Trust effectively require the indorsee to pay or apply all funds in accordance with the indorsement • Indorsements with Ineffective Restrictions include conditional indorsements and indorsements attempting to prohibit further negotiation Unqualified Indorsement one that imposes liability on the indorser Qualified Indorsement without recourse, one that limits the indorser’s liability Formal Requirements of Indorsements • Place of Indorsement Mann CH 27- 2 • Incorrect or Misspelled Indorsement Mann CH 27- 3...
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CHAPTER 27 - Special Indorsement one identifying an...

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