Commercial Paper Essay Specific

Question 1

2 requirements for a check cashing company to receive payment on an instrument endorsed:

Answer 1

1. if it is a holder in due course

2. if it exercised due care in taking the instrument

Question 2

A negotiable instrument is an unconditional promise or order to pay a fixed amount of money, if the following apply:

Answer 2

Must satisfy the requirements of a negotiable instrument under the Uniform Commercial Code: a negotiable instrument is an unconditional promise or order to pay a fixed amount of money, if the following apply:

(a) Must be payable to bearer or to order at the time it is issued or first comes in to possession of a holder.
(b) Must be payable on demand or at a definite time.
(c) Must not state any other undertaking by the person promising payment to do any act in addition to the payment of money.

Question 3

To establish status as a holder in due course,

Answer 3

the holder must have taken the instrument for value, in good faith, and without notice that the instrument contains an unauthorized signature or that any party has a defense to payment on the instrument.

Also, when the instrument was negotiated to the holder, it does not bear apparent evidence of forgery to call into question its authenticity.