Term
Holder vs. Indorser (payee or third party)
Which rule applies? |
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Definition
| Contract of Secondary Liability (at time of indorsement) |
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Term
| Requirement for a Contract of Secondary Liability |
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Definition
1. Presentment
2. Dishonor
3. Notice of Dishonor |
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Term
| A indorses a note for $1,000. The note is altered to $5,000. Maker is bankrupt. Holder can hold A for _________. |
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Definition
$1,000
(can only hold indorser for amount at the time of indorsement) |
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Term
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Definition
| A holder to go to a maker or drawee and demand payment. |
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Term
| When a holder goes to a maker (if note) or drawee (if draft) and demands payment |
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Definition
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Term
| When a maker (if note) or drawee (if draft) refuses to pay the payee (holder). |
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Definition
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Term
| Notice of dishonor requires |
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Definition
| Holder must TELL indorser or drawer (secondary party) that the note/draft has been dishonored. |
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Term
________ + _________ + __________ = contract of secondary liability
This means ___________ must pay! |
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Definition
Presentment + Dishonor + Notice of Dishonor
Indorser or Drawer MUST PAY the holder! |
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Term
| If a paper was never indorsed, no ________ liability. |
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Definition
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Term
| If "without recourse" or no signature of indorser (negotiation by delivery alone), NO ___________ liability , but could be ________ liability |
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Definition
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Term
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Definition
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Term
| Five warranties at transfer (even if bearer paper - i.e. no signature) |
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Definition
1. Title
2. Genuine Signature
3. No alteration
4. No defenses
5. No knowledge of insolvency of maker or drawer. |
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Term
| Warranties at presentment |
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Definition
| Presenter makes warranty of TITLE |
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Term
| At presentment, presenter makes warranty of _____, but not warranty of ___________. |
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Definition
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Term
| At presentment, the only possible plaintiffs are ______ or _______ (i.e. the people who presentment is made to). |
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Definition
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