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