Commercial Paper

Question 0

Presentment

Answer 0

Tendering the instrument for payment

Question 1

Negotiate

Answer 1

transfer of possession, whether voluntary or involuntary, of an instrument by a person other than the issuer to a person who becomes a holder

Question 2

Indorsement

Answer 2

a signature, other than that of a signer as maker, drawer or acceptor, that alone or accompanied by other words is made on an instrument for the purpose of (i) negotiating the instrument, (ii) restricting payment of the instrument, or (iii) incurring indorser’s liability on the instrument, but regardless of the intent of the signer, a signature or its accompanying words is an indorsement unless the accompanying words, terms of the instrument, place of the signature, or other circumstances unambiguously indicate that the signature was made for a purpose other than indorsement.

Question 3

negotiable instrument

Answer 3

To be negotiable, an instrument must be a writing signed by the maker/drawer, containing an unconditional promise or order, to pay a fixed amount of money, to order or bearer, payable on demand or at a definite time, and without stating any additional undertaking or instruction.

Question 4

Transfer Warranties

Answer 4

Entitled to enforce
signatures are authentic and authorized
no alterations
no knowledge of insolvency
no defenses against her

Question 5

Holder in Due Course

Answer 5

Holder
Value
Good faith
Without Notice of defenses or irregularities

Question 6

Real Defenses

Answer 6

Fraud in the Factum - didn’t know signing negotiable instrument

Question 7

Indorser liability

Answer 7

secondarily liable that comes into play if a note is presented to the maker/s and dishonored

Question 8

Accomodation party liability

Answer 8

primarily liable as secondary obligor

Question 9

Maker liability

Answer 9

primary liability – primary obligor

Question 10

Right of contribution

Answer 10

from other accomodation party

Question 11

right of reimbursement

Answer 11

right of accomodation party against accomadated party

Question 12

Holder

Answer 12

entitled to enforce the instrument- bearer paper or named party on the instrument

Question 13

Transfer/Delivery

Answer 13

Transfer of the instrument –> holder

Question 14

Fraudulent inducement

Answer 14

Personal defense – knew that it was a negotiable instrument

Question 15

Fraud in the factum

Answer 15

Real defense – don’t know signing negotiable instrument

Question 16

Presentment

Answer 16

enforcing the note

Question 17

Becoming a holder

Answer 17

one must be in possession of a negotiable instrument that is payable to bearer or to the identified person that is in possession.

Question 18

Negotiation=

Answer 18

transfer of possession
transferor cannot be the issuer
transfer must cause the transfer cause the transferee become a holder

Question 19

HDC - good faith

Answer 19

objective and subjective – commercially reasonable/honest

Question 20

presentment

Answer 20

tendering the instrument for payment

Question 21

Indorsement

Answer 21

signature, other than that of a signer as maker, drawer or acceptor, that alone or accompanied by other words is made on an instument for the purpose of
negotiating the instrument
resticting payment of the instrument
incurring indorser’s liability on the instrument
signature on a negotiable instrument is an indorsement

Question 22

Banks

Answer 22

Depositary Banks
Intermeditary Banks
Payor Banks

Question 23

Maker/Drawer

Answer 23

Maker – signs note as a person undertaking to pay it

Drawer - signs draft as person ordering payment by drawee