CONTRACTS 12 Flashcards
Assignment
The transfer of rights under a contract.
Assignor
A transferor in an assignment situation.
Assignee
A transferee in an assignment situation.
Negotiation
The transfer of a negotiable instrument by a person other than the issuer to a person who thereby becomes a holder.
Order Paper
An instrument that is negotiable by delivery and indorsement
Bearer Paper
An instrument that is negotiated by delivery; indorsement is not necessary.
Indorsement
The signature (and other directions) written by or on behalf of the holder somewhere on an instrument.
Indorser
A person who indorses a negotiable instrument.
Indorsee
A person to whom a negotiable instrument is indorsed.
Allonge
A separate piece of paper attached of an instrument on which an indorsement is written.
Blank Indorsement
An indorsement that does not specify a particular indorsee.
Special Indorsement
An indorsement that contains the signatures of the indorser and specifies the person (indorsee) to whom the indorser intends the instrument to be payable. It creates order paper.
Unqualified Indorsement
An indorsement whereby the indorser promises to pay the holder or any subsequent indorser the amount of the instrument if the maker, drawer, or acceptor defaults on it.
Unqualified Indorser
An indorser who signs an unqualified indorsement to an instrument.
Qualified Indorsement
An indorsement that includes the notation “without recourse” or similar language that disclaims liability of the indorser.
Qualified indorser
An indorser who signs a qualified indorsement of an instrument
Nonrestrictive Indorsement
An indoresement that has no instructions or conditions attached to the payment of the funds.
Restrictive Indorsement
An indorsement that contains some sort of instruction from the indorser.
Indorsement for Deposit or Collection
An indorsement that makes the indorsee the indorser’s collecting agent.
Holder
A person who is in possession of a negotiable instrument that is drawn, issued or indorsed to him or his order, bearer or in blank.
Holder in Due Course (HDC)
A holder who takes a negotiable instrument for value, in good faith, and without notice that it is defective or overdue
Taking for Value Requirement
A requirement that says a holder must give value for a negotiable instrument in order to qualify as an HDC
Taking in Good Faith Requirement
A requirement that says a holder must take the instrument in good faith in order to qualify as an HDC.
Good Faith
Honesty in fact in the conduct or transaction concerned. The good faith test is subjective.
Taking without Notice of Defect Requirement
A requirement that says a person cannot qualify as an HDC if she has notice that the instrument is defective in certain ways.
Time Instrument
An instrument that specifies a definite date for payment of the instrument.
Demand Instrument
An instrument payable on demand.
Dishonored Instrument
An instrument that is presented for payment and payment is refused.
Red Light Doctrine
A doctrine that says a holder cannot qualify as an HDC if she has notice of an unauthorized signature or an alteration of the instrument or any adverse claim against or defense of its payment.
No Evidence of Forgery, Alteration, or Irregularity Requirement
A requirement that says a holder cannot become an HDC to an instrument that is apparently forged or altered or is so otherwise irregular or incomplete as to call into question its authenticity.
