Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
8 Cards in this Set
- Front
- Back
|
Is An Instrument Negotiable?
|
WOSSUPP
1. Writing 2. payable to Order or bearer(“assigns” or “cash) 3. Signed by maker or drawer 4. Reciting a Sum Certain 5. Unconditional Promise or Order/no additional promises 6. Payable on demand or at a definite time 7. Payable in currency |
|
|
How Does One Become a Holder?
|
Bearer Instruments = Possession only
Order Instruments - Possession by named payee or - Possession with named payee’s indorsement |
|
|
What Is A Holder In Due Course?
|
1. Holder
2. for Value 3. Good faith 4. without Notice i. overdue or dishonored ii. contains unauthorized signature iii. there is a claim to the instrument iv. any party has a defense or claim in recoupment |
|
|
What Are The Real Defenses To A Negotiable Instrument?
“FaIDS2” |
1. Forgery of payee or special endorsee name
2. Fraud in the Factum 3. Alteration (collect only original amount) 4. Incapacity / Infancy 5. Illegality of underlying transaction 6. Duress 7. Discharge in Insolvency 8. Statute of Limitations (3 yrs from dishonor; 6 yrs from due date on demand; 10 yrs from no demand) 9. Accommodation (Suretyship) 10. other defenses known to HDC |
|
|
When Is An Indorser Liable On A Note?
|
Contract Liability only after
Presentment (may be excused for a variety of reasons; if a check, must be presented 30 days from ind.) Dishonor (not paid on demand or reasonable time) Notice of Dishonor within 30 days of dishonor (need not be given to maker or drawer) WATCH FOR “WITHOUT RECOURSE" |
|
|
What Is A Transfer Warranty?
|
Warranty Liability: by a transferor (for value) of a negotiable instrument:
1. Good title: Entitled to Enforce (clear chain of title) 2. No good defense or claim against 3. Signatures are Authentic & Authorized 4. Not Altered 5. No Knowledge of Insolvency WATCH FOR “WITHOUT WARRANTY” |
|
|
When Is A Bank Liable For Charging A Customer's Account?
|
Bank Cannot Charge Account for:
No order by depositor (drawer forged) More money than stated (amount forged) Payment to Wrong Person Postdated and there is notice |
|
|
How Long Does A Stop Payment Order Last?
|
Oral: 14 days
Written: 6 months |
