Term
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Definition
| Any instrument (such as a check) drawn on a drawee (such as a bank) that orders the drawee to pay a certain sum of money, usually to a third party (the payee), on demand or at a definite future time |
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Term
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Definition
| A draft drawn by a drawer ordering the drawee bank or financial institution to pay a certain amount of money to the holder on demand. |
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Term
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Definition
| A written promise made by one person (the maker) to pay a fixed sum of money to another person (the payee or a subsequent holder) on demand or on a specified date. |
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Term
| certificate of deposit (CD) |
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Definition
| A note of a bank in which a bank acknowledges a receipt of money from a party and promises to repay the money, with interest, to the party on a certain date. |
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Term
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Definition
| (1) In contract law, the offeree's notification to the offeror that the offeree agrees to be bound by the terms of the offeror's proposal. Although historically the terms of acceptance had to be the mirror image of the terms of the offer, the Uniform Commercial Code provides that even modified terms of the offer in a definite expression of acceptance constitute a contract. (2) In negotiable instruments law, the drawee's signed agreement to pay a draft when presented. |
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Term
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Definition
| A draft that is drawn by a seller of goods ordering the buyer to pay a specified sum of money to the seller, usually at a stated time in the future. The buyer accepts the draft by signing the face of the draft, thus creating an enforceable obligation to pay the draft when it comes due. On a trade acceptance, the seller is both the drawer and the payee. |
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Term
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Definition
| The party that initiates a draft (writes a check, for example), thereby ordering the drawee to pay |
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Term
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Definition
| The party that is ordered to pay a draft or check. With a check, a financial institution is always the drawee. |
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Term
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Definition
| A person to whom an instrument is made payable |
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Term
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Definition
| One who promises to pay a certain sum to the holder of a promissory note or certificate of deposit (CD). |
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Term
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Definition
| A signed writing that contains an unconditional promise or order to pay an exact sum of money, on demand or at an exact future time, to a specific person or order, or to bearer. |
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Term
| 6 elements of negotiability |
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Definition
| 1.in writing 2.signed by the maker or drawer 3.be an unconditional promise to pay 4.state a fixed amount of money 5.payable on demand or at definite time 6.be payable to order or to bearer, unless it is a check |
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Term
| The law governing negotiable instruments derives from which of the following? |
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Definition
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Term
| You write a check to pay for your haircut. In this transaction, who is the drawee? |
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Definition
| Your bank is, because it must pay the check. |
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Term
| The parties to a promissory note are the payee and: |
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Definition
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Term
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Definition
| A piece of paper firmly attached to a negotiable instrument, on which transferees can make indorsements if there is no room left on the instrument itself. |
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Term
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Definition
| An indorsement that specifies no particular indorsee and can consist of a mere signature. An order instrument that is indorsed in blank becomes a bearer instrument. |
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Term
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Definition
| An indorsement on a negotiable instrument in which the indorser disclaims any contract liability on the instrument; the notation without recourse is commonly used to create a qualified indorsement. |
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Term
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Definition
| Any indorsement on a negotiable instrument that requires the indorsee to comply with certain instructions regarding the funds involved. A restrictive indorsement does not prohibit the further negotiation of the instrument. |
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Term
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Definition
| An indorsement on an instrument that indicates the specific person to whom the indorser intends to make the instrument payable; that is, it names the indorsee |
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Term
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Definition
| An indorsement for the benefit of the indorser or a third person; also known as an agency indorsement. The indorsement results in legal title vesting in the original indorsee. |
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Term
| holder in due course (HDC) |
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Definition
| A holder who acquires a negotiable instrument for value; in good faith; and without notice that the instrument is overdue, that it has been dishonored, that any person has a defense against it or a claim to it, or that the instrument contains unauthorized signatures, alterations, or is so irregular or incomplete as to call into question its authenticity. |
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Term
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Definition
| The principle that the holder of a negotiable instrument who cannot qualify as a holder in due course (HDC), but who derives his or her title through an HDC, acquires the rights of an HDC. |
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Term
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Definition
| Any person who presents an instrument for payment or acceptance impliedly warrants that (1) he or she is entitled to enforce the instrument or authorized to obtain payment or acceptance on behalf of a person who is entitled, (2) the instrument has not been altered, and (3) he or she has no knowledge that the signature of the drawer is unauthorized. |
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Term
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Definition
| Implied warranties, made by any person who transfers an instrument for consideration to subsequent transferees and holders who take the instrument in good faith, that (1) the transferor is entitled to enforce the instrument, (2) all signatures are authentic and authorized, (3) the instrument has not been altered, (4) the instrument is not subject to a defense or claim of any party that can be asserted against the transferor, and (5) the transferor has no knowledge of any insolvency proceedings against the maker, the acceptor, or the drawer of the instrument. |
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Term
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Definition
| A defense that is valid against all holders of a negotiable instrument, including holders in due course (HDCs) and holders with the rights of HDCs. Universal defenses are also called real defenses. |
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Term
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Definition
| A defense that can be used to avoid payment to an ordinary holder of a negotiable instrument but not a holder in due course (HDC) or a holder with the rights of an HDC. |
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Term
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Definition
| A possessory lien given to a person who has made improvements and added value to another person's personal property as security for payment for services performed. |
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Term
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Definition
| A statutory lien on the real property of another, created to ensure payment for work performed and materials furnished in the repair or improvement of real property, such as a building |
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Term
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Definition
| In bankruptcy proceedings, the suspension of virtually all litigation and other action by creditors against the debtor or the debtor's property; the stay is effective the moment the debtor files a petition in bankruptcy. |
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Term
| debtor in possession (DIP) |
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Definition
| In Chapter 11 bankruptcy proceedings, a debtor who is allowed to continue in possession of the estate in property (the business) and to continue business operations. |
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Term
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Definition
| One who holds title to property for the use or benefit of another (the beneficiary). |
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Term
| creditors' composition agreement |
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Definition
| An agreement formed between a debtor and his or her creditors in which the creditors agree to accept a lesser sum than that owed by the debtor in full satisfaction of the debt. |
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Term
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Definition
| A person who agrees to satisfy the debt of another (the debtor) only after the principal debtor defaults; a guarantor's liability is thus secondary. |
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Term
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Definition
| A person, such as a cosigner on a note, who agrees to be primarily responsible for the debt of another. |
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Term
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Definition
| An express contract in which a third party to a debtor-creditor relationship (the surety) promises to be primarily responsible for the debtor's obligation. |
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Term
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Definition
| a lean on a property created by a court order |
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Term
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Definition
| liquidation, voluntary or involuntary |
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Term
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Definition
| reorganization, voluntary or involuntary |
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Term
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Definition
| adjustment, volintary only |
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Term
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Definition
| The bank on which a check is drawn (the drawee bank). |
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Term
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Definition
| The first bank to receive a check for payment. |
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Term
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Definition
| Any bank handling an item for collection, except the payor bank. |
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Term
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Definition
| Any bank to which an item is transferred in the course of collection, except the depositary or payor bank. |
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Term
| electronic fund transfer (EFT) |
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Definition
| A transfer of funds with the use of an electronic terminal, a telephone, a computer, or magnetic tape. |
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