Business Law Commercial Paper Chapter 29

Payee

The party to whom commercial paper is made payable.

Drawee

The person ordered to pay the draft.

Maker

The person who executes a promissory note.

Drawer

The person who executes or "draws" the draft or orders the payment

Cashiers Check

A check that the bank draws on itself.

Tellers Check

A draft drawn by a bank on funds that it has on deposit at another bank.

Travelers Check

A draft drawn by a well-known financial institution on itself or agent.

Money Order

A draft issued by the post office, or certified institution for use in paying and transferring funds.

Certified Check

A personal check that has been accepted by a bank before payment.

Draft or Bill of Exchange

An unconditional written order by one person that directs another person to pay money to a third party.

Acceptance

Drawee's promise to pay the draft when due.

Stop-Payment Order

Drawer instructs bank not to pay a check. Most often in a case of a lost or stolen check.

Certificate of Deposit

Identifies the banks written acknowledgement of the receipt of money, along with an unconditional promise to repay it at defined future time. (CD)

Real Property

Land, buildings, and those things permanently affixed. Often called realty.

Uniform Commercial Code

Laws governing the legitimacy and use of commercial paper.

Honor

Pay each check as long as sufficient funds remain--pay when due.

Dishonor

Refuse to pay a draft--most often insufficient funds.

Personal Property

Rights and interests in anything that is not real property. Can be tangible or intangible.

Check

Type of draft by which a bank depositor orders a bank to pay money.

Commercial Paper

Unconditional written orders or promises to pay money

Promissory Note

Unconditional written promise by a person to pay money according to the payee's order.

Time Draft

When a draft is payable on a set date, at the end of a specific period after sight or at the end of a specified period after the date of the draft.

Sight Draft

When a draft is payable on demand or "at sight." Drawee is expected to pay immediately upon the draft being presented for payment.

Collateral Note

When personal property is offered as security and indicated on the note.

Mortgage Note

When real property is the security for payment.