Comm Law Quiz
demand instruments are ____ time instruments are ____
NOW LATER
certificate of deposit is a demand instrument or time instrument?
time instrument
are agent signatures ok?
yes
in writing - are electronic records ok?
yes
can refer another doc? can subject to another doc or agreement?
yes no
state a fixed amount of money are interest rates ok?
yes if stated as a fixed or variable rate
•first delivery of an instruments by the maker or drawer...for the purposes of giving rights on the instrument to any person" (think issue a check)
issue
•third party receiving the money (who you make the check out to)
payee
the writing must be on material that lends itself to ___
permanence
with in writing - ___ and ___ are important
permanence, portability
the writing must also be movable
portability
•Written promise made by the Maker (Promisor) to pay the Bearer (Promisee). •Can be payable at a definite time or on demand.
promissory note
two different types of drafts 1. - payable at a definite future time 2. payable upon sight
1. time draft 2. sight draft
additional classifications of negotiable instruments
1. demand instruments 2. time instruments
4 types of negotiable instruments
1. drafts 2. checks 3. notes 4. Certificates of deposit
3 parties that draft involves
1. drawer 2. drawee 3. payee
for drafts and checks the three people involved
1. drawer 2. drawee 3. payee
for promissory note and CD the tow people involved are
1. maker 2. payee
key classifications of negotiable instruments
1. orders to pay 2. promises to pay
requirements for negotiability 1. be in ____ 2. be ___ by maker (promissory note) or drawer (draft) 3. be an ___ or ____ to pay 4. state a ___ amount of money 5. be payable on ___ or at a _____ 6. be payable ___ or to _____
1. writing 2. signed 3. unconditional promise or order 4. fixed 5. demand, definite time 6. to order, bearer
article ____ outlines requirements for the form and content of negotiable instruments and governs their negotiation (AKA transfer)
3
allows holder to demand full payment if a certain event occurs
acceleration clause
what are UCC signature requirements?
any symbol used to authenticate
transfer of rights under a contract
assignment
•A negotiable instrument can be transferred to others by _____or _____
assignment or negotiation
with cashier's check, the ____ is the drawer and drawee
bank
most common type of draft
bank check/certified check
does not specify a specific payee - rather the person in possession (the bearer) can get paid
bearer instrument
is an I.O.U acceptable?
by itself - no, promise has to be affirmative under UCC
•Type of note issued when: 1.a party (purchaser-payee) deposits funds with a bank and 2.bank promises to repay funds with interest on certain date.
certificate of deposit
checks are ___ instruments
demand
•unconditional written order involves 3 parties (think writing a check) (AKA bill of exchange)
draft
with trade acceptance, buyer of goods is the ____
drawee
•ordered by drawer to pay the money (think bank)
drawee
drawer or maker draft or check? promissory note or CD?
drawer maker
with trade acceptance - seller of goods is both __ and ___
drawer and payee
•party creating the draft also called the _____
drawer, maker
allows the date of maturity to be extended into the future
extension clause
be an unconditional promise or order to pay - terms of promise must be include in the writing on the ___ of the NI
face
with certificate of deposit - bank is ___ depositor is ____
maker payee
•a signed writing (or electronic record) •containing an unconditional promise or order to pay an exact sum of money •either on demand or at a specific future date.
negotiable instrument
•commercial paper (cash substitute or extension of credit)
negotiable instrument
for checks, drafts, and trade acceptances, must have ____ (pay to the order)
order
payable to "the order of" an identified person, or to "an identified person or order"
order instruments
be payable on demand or at a definite time payable at a definite time -- has to be at a ____ date
specified
negotiable instruments are mainly governed by ___ law
state statutory
inovice type of draft frequently used in sale of goods
trade acceptance
only ___ promises or orders can be negotiable
unconditional