Commercial Paper

Front 1

Negotiability

Back 1

- writing
-signed by the maker (note) or drawer (draft)
-containing an unconditional promise (note) or order (draft)
-to pay a fixed amount of money
-to order or bearer
-on demand or at a definite time
-which does not state any unauthorized undertaking or instruction by the person promising or ordering payment.

Front 2

Holder

Back 2

it the note was issued or negotiated to the person

Front 3

Negotiated

Back 3

specific type of transfer
- bearer paper- transferring possession
-order - authorized indorsement of the named payee plus transfer of possession.

Front 4

Holder in Due Course

Back 4

takes For Value; In good faith; and without notice that : 1) overdue or has been dishonored 3) unauthorized signature or has been altered 3) claim to the instrm 4) defense on the instrmt.
- partial HDC if value then notice then more value

Front 5

Real Defenses

Back 5

FAIDS:
Fraud in the factum and forgery
Alternation and Adjudicated Insanity
Duress, Discharge through insolvency, and Discharges known to theHDC
S- Suretyship and Statute of Limitations

Front 6

Indorser Contract Liability

Back 6

by signing promises to
1) pay on the instrument
2) according to the terms when indorsed
4) if the instrument is presented for payment, is dishonored, and the indorser is given notice of dishoner.

Front 7

Indorser Warranty Liability

Back 7

1)transfer warranty
2) presentment warranty

Front 8

Transfer Warranty

Back 8

1) person entitled to enforce the instrument 2) genuiness of signatures 3) instrument includes no material alterations 4) no defenses are good against the transferor 5) no knowledge of insolvency proceedings against maker, drawer, or acceptor.

Front 9

Presentment Warranties

Back 9

1) entitled to enforce
2) has not been altered
3) no knowledge that the drawer's signature is unauthorized.