3-103 Definitions

Question 1

Acceptor

Answer 1

a drawee who has accepted a draft

Question 2

Consumer account

Answer 2

an account established by an individual primarily for personal,

Question 3

Consumer transaction

Answer 3

a transaction in which an individual incurs an obligation primarily for personal, family, or household purposes

Question 4

Drawee

Answer 4

a person ordered in a draft to make payment

Question 5

Drawer

Answer 5

a person who signs or is identified in a draft as a person ordering payment

Question 6

Good faith

Answer 6

means honesty in fact and the observance of reasonable commercial standards of fair dealing

Question 7

Maker

Answer 7

a person who signs or is identified in a note as a person undertaking to pay

Question 8

Order

Answer 8

means a written instruction to pay money signed by the person giving the instruction. The instruction may be addressed to any person, including the person giving the instruction, or to one or more persons jointly or in the alternative but not in succession. An authorization to pay is not an order unless the person authorized to pay is also instructed to pay.

Question 9

Ordinary care

Answer 9

in the case of a person engaged in business means observance of reasonable commercial standards, prevailing in the area in which the person is located, with respect to the business in which the person is engaged. In the case of a bank that takes an instrument for processing for collection or payment by automated means, reasonable commercial standards do not require the bank to examine the instrument if the failure to examine does not violate the bank’s prescribed procedures and the bank’s procedures do not vary unreasonably from general banking usage not disapproved by Article 3 or Article 4.

Question 10

Party

Answer 10

a party to the instrument

Question 11

Principal obligor

Answer 11

with respect to an instrument, means the accommodated party or any other party to the instrument against whom a secondary obligor has recourse under Article 3.

Question 12

Promise

Answer 12

a written undertaking to pay money signed by the person undertaking to pay. An acknowledgment of an obligation by the obligor is not a promise unless the obligor also undertakes to pay the obligation.

Question 13

Remitter

Answer 13

a person who purchases an instrument from its issuer if the instrument is payable to an identified person other than the purchaser.

Question 14

Secondary obligor

Answer 14

with respect to an instrument means:

(a) an indorser or an accommodation party,
(b) a drawer having the obligation described in Section 3-414(d), or
(c) any other party to the instrument that has recourse against another party to the instrument pursuant to Section 3-116(b).