transfer of instrument

Question 1

transfer

Answer 1

-the instrument’s movement other than by the maker or drawer for the purpose of giving the person receiving it the right to enforce the instrument

Question 2

issuance

Answer 2

-first movement is from maker to payee is an issuance (not a transfer)

Question 3

subsequent movements

Answer 3

-movements after issuance prior to the payment are transfers

Question 4

shelter rule

Answer 4

• right follow the instrument
• whatever rights the transferor had transfer to the transferee

ask if holder or HDC

Question 5

Right to Transferor’s indorsement

Answer 5

-when a transferee pays value for an instrument and the transferor fails to provide a necessary indorsement, the transferee has the legal right to have the transferor provide the necessary indorsement to complete the negotiation

Question 6

exception to shelter rule

Answer 6

-a transferee who commits fraud or otherwise engages in some type of illegal activity as it relates to the instrument cannot acquire rights as a HDC