Introduction Flashcards
Approach for Commercial Paper Question
- Identify the type of paper
- Identify the Parties
- Determine if instrument is negotiable
- Determine if instrument was properly negotiated
- Determine if transferee is holder in due course
- Determine if P’s cause(s) of action are payable
- Determine any defenses
- If D liable, may liability pass to anyone else?
Note
Promise to pay (2 party instrument)
Maker- persn to pay
Payee- person entitled to payment
Certificate of deposit- not issued by financial institution
- financial institution acknowledges receipt of money and
- financial institution promises to pay the payee
Draft
An order to pay money- 3 party
Drawer- person ordering payment
Drawee- Person to make payment
Payee- person to receive payment
Check
Financial institution is the drawee and it is payable on demand
Types of Checks
Ordinary Check
Certified Check- ordinary check which bank has accepted
Cashier’s Check- drawer and drawee are same bank; person buying the check is the remitter
Teller’s Check- check drawn by one bank on another bank; person buying check is remitter
Traveler’s Check- demand instrument requiring countersignature by a person whose specimen signature already appears on instrument
What is Commercial Paper
Written instrument for payment of money