Noteson

NEGO
TIABLEINSTRUMENTSLAW
(
Atty. Glenn Subia
)
|
1
Alcazar, JMM.
2
nd
semester, SY 2013

2014
ACT 2031

Negotiable Instruments Law

Negotiable instrument
-
written contract for the payment of money which is intended as a substitute
for money and passes from one person to another as money, in such a manner as to give a holder in due
course the rig
ht to hold the instrument free from defenses available.
Functions of Negotiable instrument:
Main Functions:

Serve as substitute for money

It is a credit instrument which increases credit circulation

Other Functions

It is a medium of exchange

Increases pur
chasing power in circulation

Serves as proof of transactions

Features of Negotiable Instrument:

Negotiability

Accumulation of secondary contracts

Memorize:
Section 1. Form of negotiable instruments

It must be in writing
and signed by the maker or drawer

(maker, in case of note; drawer, in

case of bill)

Must
contain an unconditional promise or order to pay a sum certain in money

(promise, in
case of note; order, in case of bill)
Sum certain

amount that is to be unconditionally paid by the maker / dra

wer, can be
determined on the face of the instrument

Must be payable on demand, or at a fixed or determinable future time

Three options of maturity:
a.
On dem