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25 Cards in this Set
- Front
- Back
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Acceptor
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A bank (or other drawee) that accepts a check (or other draft), thereby becoming primarily liable on it.
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Accommodated party
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Someone who receives a benefit from an accommodation party.
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Accommodation party
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Someone other than an issuer, acceptor, or indorser, who adds her signature to an instrument for the purpose of being liable on it.
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Bearer paper
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A note is bearer paper if it is made out to “bearer” or it is not made out to any specific person. It can be redeemed by any holder in due course.
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Cashier’s Check
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A check drawn on the bank itself. It is a promise that the bank will pay out of its own funds.
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Certified Check
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A check the issuer’s bank has signed, indicating its acceptance of the check.
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Check
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The most common form of a draft, it is an order telling a bank to pay money.
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Consumer credit contract
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A contract in which a consumer borrows money from a lender to purchase goods and services from a seller who is affiliated with the lender.
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Conversion
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Means that (1) someone has stolen an instrument or (2) a bank has paid a check that has a forged indorsement.
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Draft
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The drawer of this instrument orders someone else to pay money.
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Drawee
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The one ordered by the drawer to pay money to the payee.
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Drawer
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The person who issues a draft.
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Holder
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For order paper, anyone in possession of the instrument if it is payable to or indorsed to her. For bearer paper, anyone in possession.
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Holder in due course
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Someone who has given value for an instrument, in good faith, without notice of outstanding claims or other defenses.
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Indorsement
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The signature of a payee.
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Indorser
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Anyone, other than an issuer or acceptor, who signs an instrument.
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Issuer
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The maker of a promissory note or the drawer of a draft.
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Maker
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The issuer of a promissory note.
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Negotiation
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means that an instrument has been transferred to the holder by someone other than the issuer.
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Note
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A promise that you will pay money. Also called a promissory note.
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Order paper
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An instrument that includes the words “pay to the order of” or their equivalent.
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Payee
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Someone who is owed money under the terms of an instrument.
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Signature liability
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The liability of someone who signs an instrument.
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Value
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The holder has already done something in exchange for the instrument.
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Warranty liability
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The liability of someone who receives payment on an instrument.
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