CHAPTER 26 - CHAPTER SUMMARY Negotiability Rule invests...

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CHAPTER SUMMARY Negotiability Rule invests instruments with a high degree of marketability and commercial utility by conferring upon certain good faith transferees immunity from most defenses to the instrument Formal Requirements negotiability is wholly a matter of form, and all the requirements for negotiability must be met within the four corners of the instrument Types of Negotiable Instruments Orders to Pay Drafts a draft involves three parties: the drawer orders the drawee to pay a fixed amount of money to the payee Checks a specialized form of draft that is drawn on a bank and payable on demand; the drawer orders the drawee (bank) to pay the payee on demand (upon the request of the holder) Promises to Pay Notes a written promise by a maker (issuer) to pay a payee Certificates of Deposit a specialized form of note that is given by a bank or thrift association Formal Requirements of Negotiable Instruments Writing any intentional reduction to tangible form is sufficient Mann CH 26- 1
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