III. Negotiability

Question 1

By Declaration

Answer 1

• Cannot be made negotiable by declaration
• can be made not negotiable by declaration
  
  • exception for checks

Question 2

Assignment Distinguished

Answer 2

• If you negotiate the instrument, you more than an assignee: you are a holder
  
  • if holder gives value, in good faith, with no notice, a “holder in due course”

Question 3

Negotiation

Answer 3

1) Order Paper
2) Bearer Paper

• once endorsements begin, look at last endorsement to determine whether instrument is order or bearer paper
• Banks may become holders even of unindorsed order paper if customer was a holder at TIME OF DELIVERY

Question 4

Order Paper Requirements

Answer 4

• TRANSFER OF POSSESSION
  
  • can be voluntary or involuntary
• INDORSEMENT BY HOLDER
  
  • special: specifies a newly payable person
  • blank: mere signature
  • must be issued to him OR properly indorsed to him

Question 5

Bearer Paper

Answer 5

by transfer of psosession alone, volutnary or involuntary