business law 14-1

business law 14-1 - Historical and Social Setting: A...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Historical and Social Setting: A negotiable instrument is a signed writing (record) that contains an unconditional promise or order to pay an exact sum of money on demand or at an exact future time to a specific person or order, or to bearer. A negotiable instrument is a contract and subject to the rules governing contract law. However, a negotiable instrument may be distinguished from an ordinary contract by the fact that a negotiable instrument may be written in a way that makes it transferable. The UCC specifies four different types of negotiable instruments: drafts, checks, promissory notes and certificates of deposit. In the United States, Articles 3 of the UCC, which governs issues relating to the issuing and negotiating of negotiable instruments have been adopted into many states in one form or another. Negotiable instruments can function as a substitute for money or as an extension of credit. In order for it to function this way, it must operate practically and be easily transferable without danger of being uncollectible. Facts:
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/07/2008 for the course BA 226 taught by Professor Darling during the Fall '08 term at Lane.

Ask a homework question - tutors are online