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18 Cards in this Set
- Front
- Back
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What are the TWO types of negotiable instruments?
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1. Promissory Note
2. Draft |
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What is a promissory note (generally)?
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- A promise to pay
- Must contain an affirmative promise to pay and not just a merer IOU |
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Who are the TWO parties to a promissory note?
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1. The maker - The promisor
2. The payee - the promisee |
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Generally what is a draft?
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- An order to pay
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What are the THREE parties for a draft?
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1. Drawer - gives the order
2. Drawee - ordered to do the paying (e.g. a bank) 3. Payee - beneficiary of the order |
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What are the SEVEN requirements for a writing to be a Negotiable Instrument?
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WOSSUPP mnemonic
1. W - A writing 2. O - Payable to either order or bearer 3. S - Signed by the maker or the drawer 4. S - Sum certain 5. U - Unconditional promise and no additional promises 6. P - Payable on demand or at a definite time 7. P - Payable in currency |
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What qualifies as a signing for a negotiable instrument?
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- Any authentication, found anywhere on the instrument, qualifies
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What is the effect if an instrument is "governed by" or "subject to" something else?
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- It is non-negotiable
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What is the effect if an instrument references an outside document with regard to tangential matters?
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- this is ok, it is still negotiable
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What is the effect if an instrument limits payment to a particular source or fund?
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- Makes it conditional and non-negotiable
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What does it mean that a negotiable instrument must state a sum certain?
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- Must be able to calculate how much is to be paid either form:
1. what the writing says; OR 2. from reference to an outside source |
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What does it mean that a negotiable instrument cannot contain any additional promises?
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Can only be for money. Any other promise makes it non-negotiable
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What are the two temporal options for a negotiable instrument?
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1. On demand
2. Definite time |
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When are the FOUR times an instrument is payable on demand?
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1. "At sight"
2. "on presentation" 3. "On demand" 4. Silent as to time of payment |
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What are the two ways a negotiable instrument can be written for a definite time?
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1. On or before a stated date; OR
2. at a fixed period after a stated date |
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What must the instrument say to be payable to order?
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must have the word
1. Order; or 2. Assigns - In connection with the payee's name |
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What are the two ways a negotiable instrument can made payable to?
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1. Payable to order - a specific person; OR
2. Payable to bearer - who every has it |
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How can a negotiable instrument be paid to bearer?
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- Should have "pay to.." "bearer" or "cash"
- Can have a person's name as long as it also has cash or bearer. - Just Pay to Andy would be non-negotiable |
