Reg Sec 18

Question 1

Promissory note

real defense against Liability(FABLE)

Answer 1

Is an instrument in which promise to pay. Under UCC in order for a note to be negotiable it has to be payable to order or to bearer.

Forgery, Alteration, Bankruptcy, Lack of capacity, Execution fraud/Extreme duress.

Question 2

Requirements of Negotiability(Coupons)
Drafts(order to pay)
Notes(promise to pay)

Answer 2

Certain amount, order or bearer, unconditional promise to pay, payment in money, on demand or specific time, signed by creator of the instrument.

Drafts are third party instruments set up as “order to pay”

Notes are two-party set up as a “promise to pay”

Question 3

Holder in due course

Holder of a holder in due course

Answer 3

someone who purchase a securities in good faith, value, or without notice of defect

A known party purchase a security from holder in due course.

Question 4

Drawee vs drawer on a draft

Answer 4

drawee has primary liability and the drawer has secondary liability.