Negotiability Flashcards
1
Q
Effect of negotiability
A
if paper is negotiable and properly negotiated, a holder in due course (HDC) gets better rights
2
Q
Elements of negotiability
A
- written
- signed by maker/drawer
- unconditional (presumed)
- promise or order to pay
- a fixed amount of money
- payable to order or bearer (exception for checks)
- payable on demand or at a definite time
- states no unauthorized undertaking or instruction
3
Q
Items that make a promse or order conditional
A
- an express condition to payment
- promise or order is “subject to” or “governed by” another record
- rights or obligations are stated in another record
4
Q
Requirements for holder status
A
- possession
- good title
