Shared Flashcard Set

Details

Advanced Business Law
Negotiable Instruments
13
Accounting
Graduate
10/06/2013

Additional Accounting Flashcards

 


 

Cards

Term
Definition of negotiable instrument
Definition
special form of contract that satisfies requirements from Article 3 of UCC. Primary benefit is to substitute for money or for record keeping.
Term
What are the 3 functions of negotiable instruments?
Definition
Substitute for money
Act as credit devices
Act as record keeping devices
Term
What are 4 types of negotiable instruments
Definition
Draft
Check
Promissory Note
Certificate of Deposit
Term
What are the 7 requirements for a Negotiable Instrument to be covered by Article 3 of the UCC?
Definition
Must be written
Must be signed by maker/drawer
But state fixed amount of money
Must have time or sight payment specifications
Must not require anything past payment of money
Must be payable to order or to bearer
Has to be unconditional promise or order to pay
Term
Definition of nonnegotiable contract?
Definition
Contract that doesn't satisfy the 7 requirements of a negotiable instrument and isn't covered by Article 3 of UCC.
Term
What are the two ways to transfer a negotiable instrument?
Definition
Assignment
Negotiation
Term
What are the 6 types of Indorsement?
Definition
Blank indorsement
Specified indorsement
Qualified indorsement
Unqualified indorsement
Restricted indorsement
Unrestricted indorsement
Term
What are the 4 qualification for a Holder in Due Course (HDC)?
Definition
Taking for value
Taking in good faith
Taking without notice of defect
No evidence of forgery, alteration or tampering
Term
Signature Liability
Definition
person can't be held contractually liable for something unless their name is on it
Term
What are the 5 transfer warranties?
Definition
transferor has good title to instrument
all signatures genuine and authorized
Instrument hasn't been materially altered
No defenses or any part are good against transferor
Transferor has no knowledge of any insolvency
Term
What are the 3 presentment warranties?
Definition
presenter has good title to instrument
Instrument hasn't been altered
presenter has no knowledge of anything being unauthorized
Term
Universal Defenses what are they (8)?
Definition
Minority
Extreme Duress
Mentally incapable
Illegality
Discharge in bankruptcy
forgery
Fraud in inception
Material alteration
Term
Personal Defenses (3) what are they?
Definition
Breach of Contract
Fraud in inducement
Supporting users have an ad free experience!