a Commercial and Negotiable Holder has a Real and Personal and Primary Transfer that is Wrongful

Question 1

Commercial

Answer 1

Commercial Personal Maker

(1) Commercial paper = WA statute enacting UCC art. 3; Checks + banks = UCC 4
(2) Personal defenses = not good against an HDC of an NI
(3) Maker/Drawer = primary liability on an instrument; Endorsers = secondary liability;

Question 2

Negotiable

Answer 2

Negotiable Check Special

(1) NI = NUTSS
(2) Checks = 3 party paper
(3) Special, Blank, Incomplete, Restrictive (deposit only), w/o recourse (K liability)

Question 3

Holder

Answer 3

Holder Takes Shelter

(1) HDC != mere assignee, protected from personal defenses.
(2) Takes = FINN S = for value (!= promise to perform,partial) + in good faith + no actual/constructive of maker’s defense + through negotiation (order, bearer = just delivery + no endorsement)
(3) Shelter rule = HDC, even if didn’t qualify

Question 4

Real

Answer 4

Real Negligence Burden

(1) Real = FIDDLS = fraud in execution, illegality, duress, discharge in, lack of capacity (6 years)
(2) Negligence = FUM = forgery, unauthorized signature, material alteration (leave blank)
(3) Burden of proof = on recharacterizer to show negligent

Question 5

Personal

Answer 5

Personal = MUUFO = mutual mistake, unauthorized completion, uncompletion of a condition precedent, fraud in the inducement, failure of consideration, or other = catch all

Question 6

Primary

Answer 6

Primary Conversion Obligation

(1) Primary liability = maker of instrument, secondary for transfer = after timely presentment (90 days from issue) and notice of dishonor = 30 days from endorsement
(2) Conversion = intentional and substantial deprivation of property from another; Forgery = class C felony
(3) Underlying obligation = due by payee; Right to sue is suspended on issue until dishonor.

Question 7

Transfer

Answer 7

Transfer Presenter Duty

(1) Transferor warranty = GANDS = good title and can enforce + no material alterations present, no knowledge of maker’s insolvency, no defense against warrantor, and all signature genuine and authorized
(2) Presenter warranty = drawee bank = GAD = good title + no material alterations present + drawer’s signature is authorized
(3) Duty != presenter, unless certified check

Question 8

Wrongful

Answer 8

Wrongful Stale Stop

(1) Wrongful honor = under the properly payable rule a bank can liable for honoring an instrument that is irregular on its face or a forgery. Businesses have 60 days, personal check 1 year to inform.
(2) Stale checks = 90 days = wrongful if complains, does not have to honor 6 month late check. Postdated = ok unless bank notified.
(3) Stop Payment order = 14 days for oral, 6 months in writing, cannot be presented again.