Term
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Definition
1. Identify type of paper (representation of money)
2. Identify the parties
3. Determine if instrument is negotiable
4. Determine if instrument was properly negotiated
5. Determine if transferee is a HDC
6. Determine plaintiff’s cause(s) of action such as contract, warranty, tort, or not properly payable.
7. Determine defendant’s defenses
8. If defendant is held liable, may defendant pass liability on to another party?
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Term
| Elements of Negotiability |
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Definition
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1. Unconditional
2. Promise (note) or order (draft) to pay (in writing, signed by maker or drawer)
3. A fixed amount of money (with or without interest)
4. Payable to order or bearer (contains words of negotiability)
5. Payable on demand or at a definite time
6. Contains no other undertaking or instruction
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Term
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Definition
| An unconditional promise or order to pay a fixed amount that is payable to order or to bearer on demand or at a definite time and does not state any unauthroized undertaking or instruction by the person promising ordering payment. |
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Term
| Elements of Negotiability: Unconditional |
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Definition
| A note that limits payment to a particular fund or source is not conditional. |
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Term
| Elements of Negotiability: Promise to Pay |
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Definition
| A note must conatin a promise to pay money, signed by the person undertaking to pay. |
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Term
| Elements of Negotiability: Fixed Amount of Money |
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Definition
| To be negotiable, the principal due under the instrument must be fixed |
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Term
| Elements of Negotiability: Payable to Order or to Bearer |
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Definition
| An instrument must be payable to order or bearer. Order paper is payable only to the person named in the Order. |
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Term
| Elements of Negotiability: Payable on Demand |
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Definition
| To be negotiable an instrument must be payable on demand or at a definite time. |
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Term
| Elements of Negotiability: No Unauthorized Undertaking |
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Definition
| Negotiable instruments are just promises or orders to pay money. Instrument, not a full contract. |
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