Business Law - Chapter 16

Maker

A person who signs a not that is a person who promises to pay

Draft (Bill of Exchange)

Acceptance is the drawee's signed agreement to pay the draft as presented.

Certified Check

Check Guaranteed by the bank

Cashiers Check

Check drawn by a bank upon itself.

Bank Draft

Check drawn by one bank on another bank in which it has funds on deposit in favor of a third person

Check

Draft drawn on a bank and payable on demand

Foreign Draft

Draft that is drawn in one country but payable in another

Money Order

Draft that may be purchased from banks, post office and express companies as a substitute for a check

Issuer

Either a maker or drawer of an instrument

Bearer Paper

Instrument that is payable to bearer or cash

Order Paper

Instrument that is payable to order

Certificate of deposit

Is an instrument containing an acknowledgment that a bank has received a sum of money and a promise by the bank to repay the sum of money

Time Draft

Is not payable until the lapse of a particular time for period stated on the draft.

Acceptance

The drawee's signed agreement to pay the draft as presented

Travelers Check

The issuing financial institution is both the drawer and the drawee

Installment Note

The principal together with the interest on the unpaid balance is payable in a series of payments at specified times.

Assignment

Transfer of a contrat right from one person to another

Negotiation

Transfer of an instrument in such form that the transferee becomes a holder

Domestic Bill of Exchange

is a draft that is drawn and payable in the United States

Bearer

Person who is in possession of a negotiable instrument that is payable to the bearer or to cash

Drawee

Person who ordered in a draft to make payment

Drawer

Person who signs a draft, one who orders payment

Acceptor

A drawee of a draft who has promised to honor the draft as presented by signing it on its face

Holder in due course

Holder of a negotiable instrument who is treated as favored and given immunity from certain defenses

Restrictive Indorsement

Limits the rights of the indorsee in some manner to protect the rights of the indorser.

Special Indorsement (Indorsement in full)

Made by writing the words "pay to the order of or pay to) followed by the name of the person to whom it is to be transferred

Allonge

Must be written or word processed on a separate paper

Qualified Indorsement

One in which words have been added to the signature that limit the liability of the indorser

Sight Draft

Payable as soon as it is presented to the drawee for payment

Demand Note

Payable whenever the payee demands payment

Payee

Person to whom a note or draft is payable

Indorser

Person who indorses a negotiable instrument

Holder

Person who is in possession of a negotiable instrument that is issued or endorsed to that persons order or bearer

Conditional Indorsement

Restrictive indorsement purports to make the rights of the indorsee subject to the happening of a certain event or condition

Blank Endorsement

Signature alone written on the instrument. No particular indorsee

Comaker

Two or more people who sign the same note promising to pay

Negotiable Instrument

Written document signed by the maker that contains an unconditional promise or order to pay a fixed amount of money on demand or at a definite time to the bearer or to the order.

Note

Written promise by one party (Maker) to pay money to the order of another party called the Payee

Conversion

Wrongful exercise of dominion and control over another's personal property

Indorsee

person to whom a draft, note or other negotiable instrument is transferred by indorsement