Commercial Paper Mine

Front 1

Elements of HDC Status

Back 1

1. Negotiable Instrument
2. Holder
3.Authenticity not apparently questioned (no forgery, alteration)
4. holder must pay value
5.good faith
6.without notice at time of instrument acquisition

Front 2

What is or is not notice for HDC status?

Back 2

notice = actual knowl (subj) + reas. time to act on the notice; all facts known to person at time (subj)-> reason to know (obj)

consider:
not filing in public record
1.overdue principal (not interest) 90 days after check
2.instrument dishonored
3.uncured defalt w/ respect to payment of another instrument issued as part of the same series
4.unauthorized signature
5.alteration
6.any claim (superior rights to interest)
7.any defense or claim in recoupment

Front 3

What is guaranty of payment?

Back 3

holder may collect from accommodation party first without having to attempt to collect from accommodated party first.

Front 4

What is guarantee of collection?

Back 4

holder may not collect from accommodation party first without attempting to collect from accommodated party first

Front 5

Elements of Negotiability

Back 5

1.in writing
2.signed by maker/drawer
3.unconditional promise or order to pay
4.fixed amount
5.in money
6.no other undertaking or instruction
7.payable on demand or definite time
8.contains words of negotiability

Front 6

A Holder in Due Course is a holder who takes:

Back 6

for value
in good faith
WITHOUT NOTICE that:
i.the instrument is overdue or has been dishonored;
ii.the instrument contains an unauthorized signature or has been altered;
iii.there is a claim to the instrument (someone else claims ownership); or
iv. any party has a defense on the instrument

Front 7

Only the following Real Defenses may be raised against a HDC:

Back 7

FAIDS
F - Fraud in the factum and Forgery;
A - Alteration and Adjudicated Insanity;
I - Infancy and Illegality;
D - Duress, Discharge through insolvency and Discharges known to the HDC; and
S - Suretyship and Statue of Limitations