CHAPTER 1

Requisites of Negotiability FORM:

1In writing and signed by the drawer or maker Contain an unconditional promise or order to pay a sum certain in money Payable on demand or at a fixed or determinable future time Payable to order or bearer When instrument is addressed to a drawee, he must be named therein or indicated w/ reasonable certainty 184 PN = b) made by one person to another, signed by the maker, engaging to c) d) 126 BOE = b) addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to c) d) Written Form and Signature 18Trade Name = same extent liable as if own name 19 Agents authority = no particular form of agency necessary; valid as long as intention to make the instrument the makers or drawers is shown Unconditional order or promise to pay = unqualified! 3 Unconditional though coupled with: a) Indication of a particular fund where reimbursement is to be made/ to be debited b) Statement of transaction giving rise to the instr But an order/ promise to pay out of a particular fund is conditional Sum payable must be certain 2Certainty of time of payment: sum certain though it is to be paid: a) With interest b) By stated installments c) By stated installments w/ acceleration clause d) With exchange, either fixed or current e) With costs of collection or attys fees, in case payment shall not be made at maturity Payable in money = if stipulated that payment should be in another currency, such stipulation will be ineffective. But negotiability not affected Additional act to the payment of money= NOT nego Certainty of time of payment 7 Demand =a) on demand, at sight, on presentation b) No time for payment is expressed c) when overdue, w/ regard to the issuer Payable at a determinable future time 4a) at a fixed period after date or sight b) On or before a fixed or determinable future time c) On or at a fixed period after occurrence of a specified event certain to happen, though uncertain 11presumption of date = prima facie

to order:8specified person, or to him or his order tobearer:9 a) expressed payable to bearer b) payable to him or bearer c) fictitious or non-existing person, such fact known to the person making it so payable d) name of payee does not purport to be the name of any person e) indorsement in blank Parties must be designated with certainty 128 May be addressed to more than one drawee JOINTLY, not alternatively or in succession 130When Bill may be treated as PN: a) where drawer and drawee are the same person b) where drawee is fictitious person w/o capacity NOT affecting negotiability: 5 Provisions which: a) authorize sale of collateral securities in case instrument not be paid at maturity b) authorize confession of judgment in case instrument not be paid at maturity c) waives the benefit of any law intended for the advantage or protection of the obligor d) gives holder an election to require something to be done in lieu of payment of money -- but it shall not validate any illegal prov/stip 6 Omissions: a) not dated b) does not specify value given, or if any value given c) does not specify place drawn, or payable d) bears a seal e) designates a particular kind of currency in which payment is to be made -- but it shall not repeal any statute requiring in certain cases, the nature of consideration Rules of construction17 Where instrument/ language is ambiguous, or omissions therein, the following rules shall apply: a) Words over figures b) Interest: runs from date of instrument. If undated, from issue thereof c) If undated, from time of issuance d) Written over Printed e) Ambiguous whether bill or note; at his election f) If unclear capacity, deemed indorser g) I promise to pay signed by 2 or more persons, deemed joint and severally liable