Académique Documents
Professionnel Documents
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Chapter 28
Kinds of Instruments, Parties,
and Negotiability
Twomey-Jennings, Andersons Business Law and the Legal Environment, 21st Ed.
2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Twomey-Jennings, Andersons Business Law and the Legal Environment, 21st Ed.
2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
[LO.1]
2. Kinds of Instruments.
(A) Promissory Notes.
(B) Certificates of Deposit.
(C) Drafts.
(D)Checks.
Twomey-Jennings, Andersons Business Law and the Legal Environment, 21st Ed.
2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Twomey-Jennings, Andersons Business Law and the Legal Environment, 21st Ed.
2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Twomey-Jennings, Andersons Business Law and the Legal Environment, 21st Ed.
2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Types of Instruments
and Parties
Maker (Borrower)
Notes
Payee
Certificates
of
Deposit
Maker (Bank)
Payee
Drawer (Seller)
Drawee (Buyer)
Draft
Drawee (Bank)
Payee
B. Negotiability
4. Definition Of Negotiability
5. Requirements Of Negotiability
6. Factors Not Affecting Negotiability
7. Ambiguous Language
8. Statute Of Limitations
Twomey-Jennings, Andersons Business Law and the Legal Environment, 21st Ed.
2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
B. Negotiability
4. Definition of Negotiability.
5. Requirements of Negotiability. [LO.3]
(A) A record (writing).
(B) Authenticated (signed) by the maker
or the drawer.
Agent,
Absence of Representative Capacity or
Identification of Principal.
Twomey-Jennings, Andersons Business Law and the Legal Environment, 21st Ed.
2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
B. Negotiability
5. Requirements for Negotiability (continued):
(C) Promise or Order to Pay.
(D) Unconditional Promise or Order.
Major Products case: Post-It note is separate
from instrument.
Twomey-Jennings, Andersons Business Law and the Legal Environment, 21st Ed.
2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
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B. Negotiability
5. Requirements for Negotiability. (continued).
(G) Time of Payment.
(1) Demand.
(2) Definite Time.
Smith v. Vaughn: When you can is not
payable on demand.
Twomey-Jennings, Andersons Business Law and the Legal Environment, 21st Ed.
2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
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B. Negotiability
5. Requirements for Negotiability (continued).
(H) Words of Negotiability: Payable to
Order or Bearer. If only to John Jones
it is not negotiable.
Sirius v. Erickson case: note was
nonnegotiable and governed by contract law
because it was made payable to only one
person and did not contain order language.
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Negotiable
Pay to cash
Pay to the order of cash
Pay to the order of Thomasina Jones
Pay to John Jones, bearer
Negotiable
NOT
NEGOTIABLE
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B. Negotiability
6. Factors not Affecting Negotiability. Omitting
date of execution or post-dating has no
effect. Nor does provision relating to
collateral.
7. Ambiguous Language.
Twomey-Jennings, Andersons Business Law and the Legal Environment, 21st Ed.
2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
14
B. Negotiability
8. Statute of Limitations
Twomey-Jennings, Andersons Business Law and the Legal Environment, 21st Ed.
2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
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