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39 Cards in this Set

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  • Back
negotiable instrument
any paper used in commercial transactions that bears evidence of debt and is transferable by endorsement such as a check, note or draft
negotiable words
a negotiable instrument must contain these words, such as "pay to the order of"
promissory note
written evidence of debt, coupled with an unqualified promise to pay
cognovit
means he/she has acknowledged
demand notes
are payable whenever the payee requests kpayment
collateral
means side by side, and is anything of value pledged as addiitonal security for the performance of the main obligation
holder in due course
transferee of a negotiable instrument with a favored position over other holders
payee
the person to whom the promise to pay is made in a promissory note
maker
the person who promises to pay a promissory ote on its due date
legal tender
money that the law requires a creditor to accept in payment of a debt
surety
one who makes himself or herself responsible for anothers debts or obligations
accomodation note
one that is assigned by second party as cosigner to ensure payment when due
debenture
interest-bearing bond of a cooperation issued without security
commercial paper
term used to refer to a written contract for the payment of money
negotiable
that which can be sold or transferred readily to a third person and accepted in place of cash is negotiable
principal
the person who is primarily responsible for payment of a promisorry note
comaker or cosigner
a comaker of a note becomes secondarily liable for its payment
installment note
is an ordinary note, payable in installment note; it allows the holder to have judgment entered without starting a lawsuit
cognovit nnote
under this note, a debtor has confessed judgment and the justice of the claim and directs entry of judgment against himself in case of nonpayment of the debt
compound interest
interest on interest
usury
word meaning illegal interest
endorsement
the signing of ones name as payee or transferor onthe back of a check or other negotiable instrument
draft
written order from one person or firm directing the payent of money to another
bond
long-term obligation issued by a private or public corporation to secure money on a loan
certificate of deposit
negotiable instrument issued for a stated period by a bank to a depositor who has deposited a specific amount of money
interest
money paid for the use of money
blank endorsement
when a payee writes only his name on the back of a check
bill of exchange
a draft is also known as a bill of exchange
drawer
the drawer of a draft makes the request order
dishonored
when any party to negotiable negotiable instrument refuses to perform his or her part
check
credit instrument that is an order for money drawn on a bank against a depositors account
cashier's check
issued by a bank or banker directly against the funds of the bank
allonge
a piece of paper attached to a commercial paper to hold "overflor" endorsements
full endorsement
names the party to whom title is transferred when placed by a person on a negotiable instrument
restrictive endorsement
stops or restrics further negotiability of a commercial paper
payee
the payee of a draft is the person in whose favor the draft is made
forgery
fraudulently making or altering any writing to the pejudice of anothers rights
protest
is the term given a notarized written statement that the principals on a negotiable instrument have failed to perform
qualified endorsement
contains the words without recourse