Term
| Definition of negotiable instrument |
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Definition
| special form of contract that satisfies requirements from Article 3 of UCC. Primary benefit is to substitute for money or for record keeping. |
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Term
| What are the 3 functions of negotiable instruments? |
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Definition
Substitute for money
Act as credit devices
Act as record keeping devices |
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Term
| What are 4 types of negotiable instruments |
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Definition
Draft
Check
Promissory Note
Certificate of Deposit |
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Term
| What are the 7 requirements for a Negotiable Instrument to be covered by Article 3 of the UCC? |
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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 |
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Term
| Definition of nonnegotiable contract? |
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Definition
| Contract that doesn't satisfy the 7 requirements of a negotiable instrument and isn't covered by Article 3 of UCC. |
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Term
| What are the two ways to transfer a negotiable instrument? |
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Definition
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Term
| What are the 6 types of Indorsement? |
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Definition
Blank indorsement
Specified indorsement
Qualified indorsement
Unqualified indorsement
Restricted indorsement
Unrestricted indorsement |
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Term
| What are the 4 qualification for a Holder in Due Course (HDC)? |
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Definition
Taking for value
Taking in good faith
Taking without notice of defect
No evidence of forgery, alteration or tampering |
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Term
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Definition
| person can't be held contractually liable for something unless their name is on it |
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Term
| What are the 5 transfer warranties? |
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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 |
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Term
| What are the 3 presentment warranties? |
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Definition
presenter has good title to instrument
Instrument hasn't been altered
presenter has no knowledge of anything being unauthorized |
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Term
| Universal Defenses what are they (8)? |
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Definition
Minority
Extreme Duress
Mentally incapable
Illegality
Discharge in bankruptcy
forgery
Fraud in inception
Material alteration |
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Term
| Personal Defenses (3) what are they? |
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Definition
Breach of Contract
Fraud in inducement |
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