Probably not going to get our tests back today, either. Not terribly worried; I saw my multiple choice section answers, and I did all right so far. I don’t think I did too badly on the essays.
Accordin’ to the blackboard, today we’re starting our negotiable instruments section, and then we’re getting the open-book contract test.
Just got handed a scantron for the open-book take-home exam. More or less the second half of the previous test. Mostly dealing with Article 2 of the UCC. Unit 4 of the texbook, perhaps a little of Unit 3. Due April 9. There are 55 question, of which 50 will count. Use the scantron; don’t mark the exam packet.
Now, on to the negotiable instruments.
A Negotiable Instrument is a signed written record that contains an unconditional promise or order to pay an exact amount of money, either on demand or at a specific future time.
There are four primary types of negotiable instruments.
- Drafts are three-party instruments. The drafter orders the draftee to pay money to a third party, the payee.
- Checks are more-or-less checks where the draftee is a bank, and the drafter has an account at that bank.
- Notes or promissory notes are written promises made by one person to pay another .
- Cetificates of Deposit are a type of note issued by a bank when a party deposits funds with that bank, where the bank promises to repay those funds plus interest on a certain date.
To be a valid negotiable instrument, a document must meet the following requirements:
- Be in writing
- Be signed by the maker or drawer
- Be an unconditional promise or order to pay
- State a fixed amount of money
- Be payable on demand or at a definite time
- Be payable to order or to bearer, unless it is a check
Negotiable instruments can be asigned under contract law or by negotiation.
Order Paper is an instrument specifically required to be endorsed and delivered to the payee. It does not become negotiable until endorsed and delivered.
Bearer Paper is an instrument which becomes negotiable upon delivery to its recipient, without requiring endorsement.