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MORT 234 Ethics And Laws I > 20-24 Negotiable Instruments > Flashcards

20-24 Negotiable Instruments Flashcards

1
Q

Unauthorized change or completion of negotiable instrument to modify obligation of a party

A

Alteration

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2
Q

Liability without conditions for commercial paper that is due

A

Primary liability

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3
Q

Liability for a negotiable instrument that has been presented, dishonored, and notice of dishonor given

A

Secondary liability

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4
Q

Demand for acceptance or payment of commercial paper

A

Presentment

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5
Q

When a presentment is made, but acceptance or payment not yet made

A

Dishonor

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6
Q

The drawee bank

A

Payor bank

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7
Q

Not all payments on instrument fully made and not all made by due date

A

Uncured default

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8
Q

Holder subsequent to holder in due course

A

Holder through a holder in due course

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9
Q

Rule giving rights of holder in due course

A

Shelter principle

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10
Q

Certification of notice of dishonor by authorized official

A

Protest

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11
Q

Goods or services primarily for personal, family, or household use

A

Consumer goods or services

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12
Q

Claim by the party being sued against the party suing

A

Setoff

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13
Q

Defense that cannot be used against a holder in due course

A

Limited or personal defense

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14
Q

Defense against any holder

A

Universal or real defense

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15
Q

The act of transferring ownership of negotiable instrument, by indorsement, delivery, or physical transfer

A

Negotiation

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16
Q

Signature or statement of purpose by the owner, signature of the payee or other holder, placed on the back of a negotiable instrument that indicates future control of instrument

A

Indorsement

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17
Q

Left side of front of check

A

Trailing edge

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18
Q

Paper so firmly attached to an instrument as to become part of it

A

Allonge

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19
Q
  • the handwritten signature of the payee on the back of a check
  • indorsement that does not state to whom the instrument is to be paid
  • having no words other than the signature of the indorser
A

Blank indorsement

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20
Q

An indorsement which designates the particular person to whom payment is to be made

A

Special indorsement

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21
Q

An indorsement which limits the liability of the indorser

A

Qualified indorsement

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22
Q

An indorsement which prevents / limits the use of the funds for anything except the stated purpose
“For Deposit Only”

A

Restrictive indorsement

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23
Q

Bank receiving check for deposit

A

Depository bank

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24
Q

Act indicating intention to destroy the validity of an instrument

A

Cancellation

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25
Q

Unilateral act of holder giving up rights in the instrument or against a party to it

A

Renunciation

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26
Q

An order by a depositor requesting a bank not to pay on a check previously issued

A

Stop payment order

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27
Q

Check presented more than 6 months after its date

A

Stale check

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28
Q

Check which has been paid by the bank and returned to the drawer for record-keeping

A

Canceled check

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29
Q

Check the drawee bank refuses to pay for reasons such as insufficient funds or closed accounts

A

Bad check

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30
Q

A check not paid by the bank when properly presented

A

Dishonored check

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31
Q

Check drawn prior to its date

A

Postdated check

32
Q

Pre-printed instrument in fixed amount requiring signature and countersignature

A

Traveler’s check

33
Q

Check with voucher attached

A

Voucher check

34
Q
  • an order by a depositor on the bank to pay a sum of money to a payee
  • draft drawn on a bank and payable on demand
  • piece of commercial paper drawn on funds in a bank account and payable on demand
A

Check

35
Q
  • an ordinary check which an official of the bank has accepted by writing across the face of the check the word “certified” or some similar word, and signed
  • a check for which the bank assures that the drawer has sufficient funds to make payment
  • a check which carries the guarantee of the bank that sufficient funds are available to pay the check when it is presented
A

Certified check

36
Q

A check draw on a bank’s own funds and signed by a responsible bank official or cashier

A

Cashier’s check

37
Q
  • check drawn by one bank on another bank in which it has funds on deposit
A

Bank draft (teller’s check)

38
Q

Sealed, written contract obligation with essentials of note

A

Bond

39
Q

Bond with detachable individual coupons representing interest payments

A

Coupon bond

40
Q

Bond payable to specific person, whose name is recorded by issuer

A

Registered bond

41
Q

Note secured by personal property

A

Collateral note

42
Q

Note secured by mortgage on real estate

A

Real estate mortgage note

43
Q

Unsecured bond or note issued by a business

A

Debenture

44
Q

Acknowledgement by bank of receipt of money with engagement to repay it with interest

A

Certificate of deposit (CD)

45
Q

Written order signed by one person requiring the person to who addressed to pay a particular sum of money, to order or to bearer, on demand or at a certain time

A

Drafts

46
Q

Draft drawn in one state an payable in the same or another state

A

Inland draft

47
Q

Draft payable upon presentation of draft’s holder

A

Sight draft

48
Q

Draft payable a certain number of days or months after date or presentation

A

Time draft

49
Q

Drawee’s signed agreement to pay draft

A

Acceptance

50
Q

Draft drawn by seller on purchaser of goods and accepted by purchaser

A

Trade acceptance

51
Q

Instrument issued by business indicating payee may receive financial instrument’s indicated amount

A

Money order

52
Q

Transferability

A

Negotiability

53
Q

First delivery of negotiable instrument by maker or drawer to give rights to another

A

Issue

54
Q

Intentional transfer of possession and control of something

A

Delivery

55
Q

EFTs begun at retailers when customers pay for goods or services

A

Point of sale system (POS)

56
Q

Automatic deposit of funds to an account

A

Preauthorized credit

57
Q

EFT terminal that performs routine banking services

A

Automated teller machine (ATM)

58
Q

-document of payment, such as a check
- a writing drawn in a special form which can be transferred from person to person as a substitute for money or as an instrument of credit

A

Commercial paper
Negotiable instrument

59
Q

Rules applied by courts set up by merchants in early England, prior to 1400

A

Law merchant

60
Q

The act of transferring ownership of negotiable instrument to another party

A

Negotiation

61
Q
  • a person in possession of a NI who accepts the NI in good faith and for value
  • person who acquires rights superior to original owner
  • holder for value and in good faith with no knowledge of dishonor, defenses, or claims
A

Holder in due course

62
Q

Commercial paper made payable “to the order of” some named party

A

Order paper

63
Q

Commercial paper payable to any person in possession of it, the bearer

A

Bearer paper

64
Q

Written order by one person direction another person to pay a sum of money to a third person

A

Draft (bill of exchange)

65
Q
  • NI containing a promise to pay
  • an unconditional promise in writing made by one party to another, signed by the maker, engaging to pay on demand or at a particular time, a particular sum of money to order or to bearer
A

Promissory note

66
Q

The party to whom any NI is made payable

A

Payee

67
Q
  • the person who executes any draft
  • a personal (depositor) who signs a check, ordering a payment to be made
A

Drawer

68
Q

The person, company, or financial institution ordered to make a payment on a check or draft

A

Drawee

69
Q

Person who agrees to pay a draft, receive goods, or assent to an order

A

Acceptor

70
Q

Automatic deduction of bill payment from checking account

A

Pre authorized debit

71
Q

Shortening a check’s trip from the payee to the drawee bank and then the drawer

A

Check truncation

72
Q

Fund transfer initiated electronically, telephonically, or by computer

A

Electronic funds transfer (EFT)

73
Q

Person who executes, signs, or promises to pay on a promissory note

A

Maker

74
Q
  • person in possession of a NI
  • payee of an instrument made payable to whoever is in possession of the instrument
A

Bearer

75
Q
  • person in possession of instrument payable to bearer
  • person in possession of a delivered NI
A

Holder

76
Q
  • payee of note or draft transferring the instrument to another party
  • person who indorses a NI
  • person whose name is written on the back of an NI
A

Indorser

77
Q
  • named holder of indorsed NI
  • person who becomes the holder of a NI by indorsement which names him/her as the person to whom the instrument is negotiated
A

Indorsee

MORT 234 Ethics And Laws I (9 decks)

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