Negotiable Instruments

Question 1

What are the six characteristics of a negotiable instrument?

Answer 1

• Be in writing
• Be signed by the maker or drawer
• Contain an unconditional promise or order to pay
• State a fixed sum of money
• Be payable on demand or at a fixed time
• Be payable to order or to bearer

Question 2

What are the requirements to be considered a Holder in Due Course (HDC)?

Answer 2

• holder of a negotiable instrument
• give value for the negotiable instrument
• took the negotiable instrument in good faith
• no notice that the negotiable instrument is overdue, dishonored, or that anyone has a defense or claim