Instruments and Parties

Question 1

Note

Answer 1

1) two party commercial paper

2) where the maker promises to pay money to the payee or bearer

Question 2

Check (Draft)

Answer 2

1) Three party commercial paper
2) where the drawer orders the drawee to pay a payee
3) bank is called the payor

Question 3

Certified Check

Answer 3

Ordinary check which bank has accepted (agreed) to pay

Question 4

Cashiers Check

Answer 4

Drawer and Drawee are the bank, person buying the check is the customer

Question 5

Remotely Created Item

Answer 5

1) A draft not signed by the drawer but created with the drawer’s authorization so that a 3rd party can get paid from the drawer’s account at a bank.
2) The third party is usually a merchant in an internet sales transaction or when you pay bills over the phone