Term
| Requirements of a negotiable instrument |
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Definition
- Written
- Signed by maker/drawer
- Unconditional promise or order
- Fixed amount of money (with or without interest)
- Payable to order or to bearer
- Payable on demand or at definite time
- No undertaking or instruction to drawer |
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Term
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Definition
- 2 party instrument
- Maker promises to pay the payee |
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Term
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Definition
- 3 party instrument
- Drawer order the drawee (payor) to pay the payee |
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Term
| Conditions for a drawer's liability |
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Definition
- Presentment to the drawee
- Dishonor by the drawee
- Notice of the dishonor to the drawer |
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Term
| Definition of "holder in due course" |
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Definition
A holder of a negotiable instrument who takes the instrument:
- In good faith
- For value
- Without notice (that it's overdue, unauthorized signature, of any defense against or claim) |
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Term
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Definition
- Person in possession if instrument payable to "bearer"
- Identified person if instrument payable to identified person |
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Term
| An HDC takes free of all defenses, except the "real" defenses: |
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Definition
- Infancy
- Duress, lack of legal capacity, illegality
- Fraud in the factum
- Discharge in insolvency proceeding |
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