Exam 1 UCC-3 Flashcards
what are the 5 real defenses
- bankruptcy
- forgery
- judicial insanity
- material altercation
- fraud in the execution
what are the 5 personal defenses
- breach of contract
- failed consideration
- wrongful completion
- duplicate payment
- fraud in the inducement
being a holder in due course gets rid of what type of defenses
personal
Can the payee be a holder in due course
NEVER
why can the payee not be a holder in due course
they have constructive knowledge
what are the five criteria for a negotiable contract
- unconditional promise to pay to the order or bearer
- payable on demand or at a specific time
3.sum certain - in writing (just somewhat portable)
- signed
is bearer on demand a negotiable instrument
yes
what is a bearer on demand
a note/ instrument that is payable to the person who is in possession of it at any time when the bearer requests payement
a party is considered a holder in due course if they receive the negotiable instrument ….
in good faith; with value given in exchange for the NI; no notice of issues with the instruments
who is liable for forgery if it happens on the back of a check
the depository bank
who is responsible if forgery happens on the front of the check
drawee
who is the drawer
the maker of the NI who signs a draft
three party instrument
draft
who is the drawee
the person (usually bank) that’s being directed to pay
who are the three parties in a draft
drawee, drawer, payee
two party instrument
Note
what are the two parties in a note
payee, maker
what kind of negotiable instrument is a cashier’s check
draft
what is a cashier’s check
when the bank is drawing on itself
can you stop payment on a cashier’s check
no
what is the closest to cash that you can get
cashier’s check
what is a ceritified check
a draft “certified” by the bank
what is a CD
note where the bank is the debtor
what are three special items
CD, cashier’s check, certified check
