Commercial Paper

Question 1

Check

Answer 1

Under UCC Article 3, a check is a draft payable on demand and drawn on a bank.

Question 2

Note

Answer 2

Under UCC Article 3, a note is a two-party commercial paper that consists of a promise by one party, the maker, to pay money to another party, the payee.

Question 3

Draft

Answer 3

Under UCC Article 3, a draft is a three-party instrument that is an order by the drawer to the drawee demanding that the drawee pay money to a third party, the payee.

Question 4

Holder in due course (HDC)

Answer 4

Under UCC Article 3, a holder in due course is a person who takes a negotiable instrument for value, in good faith, and without notice of any defenses or claims to the instrument.