QUICKIE NOTES NEGOTIABLE INSTRUMENTS LAW

Requisites(of(Negotiability( to!pay!a!sum!certain!in! pay! a! sum! certain! in!

! money.! money.!
An! instrument! to! be! negotiable! must! conform! to! Note:% If! ‘authorized! to!
the!following!requirements!(WUPOA):! pay’,! it! is! nonP
a.! It! must! be! in! writing! and! signed! by! the! negotiable.!
maker!or!drawer;! It! must! be! payable! on! It! must! be! payable! on!
b.! It!must!contain!an!unconditional!promise! demand,! or! at! a! fixed! demand,! or! at! a! fixed!
or!order!to!pay!a!sum!certain!in!money;! or!determinable!future! or!determinable!future!
c.! It!must!be!payable!on!demand,!or!at!a!fixed! time.! time.!
or!determinable!future!time;! It! must! be! payable! to! It! must! be! payable! to!
d.! It! must! be! payable! to! order! or! to! bearer;! order!or!to!bearer.! order!or!to!bearer.!
and! 1! presentment:! The! drawee! must! be!
e.! Where! the! instrument! is! addressed! to! a! payment! named! or! otherwise!
drawee,! he! must! be! named! or! otherwise! indicated! with!
indicated! therein! with! reasonable! reasonable!certainty.!
certainty.!(Sec.%1,%NIL)! !
! 2! presentments:!
When!negotiability!ends! acceptance! ad!
1.! It!has!been!restrictively!indorsed;!or! payment!
2.! Discharged!by!payment!or!otherwise! !
! !
! When( a( Bill( of( Exchange( is( treated( as( a(
Functions(of(a(negotiable(instrument((SMFI)( Promissory(Note((FANS)(
1.! It!operates!as!a!substitute!for!money.! 1.! The!drawee!is!a!fictitious!person;!!
2.! It! is! a! means! of! creating! and! transferring! 2.! The!instrument!is!so!ambiguous!that!there!
credit.! is!doubt!whether!it!is!a!bill!or!a!note;!
3.! It!facilitates!the!sale!of!goods.! 3.! The!drawee!has!no!capacity!to!contract;!
4.! It! increases! the! purchasing! medium! in! 4.! The!drawer!and!the!drawee!are!the!same!
circulation.! person!
! !
Features(of(a(negotiable(instrument( Persons(Involved(
1.! Negotiability! 1.! Maker!
2.! Accumulation!of!secondary!contracts! 2.! Payee!
! 3.! Drawer!
! 4.! Drawee!
Kinds(of(negotiable(instruments( 5.! Acceptor!–!a!drawee!who!accepts!the!order!
1.! Promissory!note! to!pay!made!by!the!drawer!
2.! Bill!of!exchange! 6.! Holder!
! 7.! Referee!in!case!of!need!
Promissory(note(v.(bill(of(exchange( !
( !
Promissory(Note( Bill(of(Exchange( When(is(an(instrument(payable(to(bearer(
It! must! be! in! writing! It! must! be! in! writing! (FENDI)(
and! signed! by! the! and! signed! by! the! 1.! When! it! is! payable! to! the! order! of! a!
maker.!! drawer.! fictitious!or!nonPexisting!person;!and!such!
! ! fact!was!known!to!the!person!making!it!so!
There! are! 2! parties! There!are!three!parties! payable;!
(maker,!payee).! (drawer,! drawee,! 2.! When!it!is!expressed!to!be!so!payable;!
! payee).! 3.! When! it! is! payable! to! a! person! named!
! ! therein!or!bearer;!
Maker! is! primarily! Drawer! is! secondarily! 4.! When! the! name! of! the! payee! does! not!
liable.! liable.! purport!to!be!the!name!of!any!person!(pay!
It! must! contain! an! It! must! contain! an! to!cash);!
unconditional!promise! unconditional!order!to!

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 QUICKIE NOTES NEGOTIABLE INSTRUMENTS LAW

5.! When! the! only! or! last! indorsement! is! an! 1.! Indorsement! must! be! of! the! entire!
indorsement!in!blank.! instrument.!
! 2.! Negotiation! to! two! or! more! indorsees!
! severally!is!not!allowed.!
Who(may(be(payees(in(an(order(instrument( !
! Kinds(of(indorsement(
1.! A!payee!who!is!not!the!maker,!drawer!or! 1.! Blank!
drawee;! 2.! Special!!!
2.! Drawer!of!maker;! 3.! Qualified!
3.! Drawee;! 4.! Conditional!
4.! Two!or!more!persons!jointly;! 5.! Restrictive!–!prohibits!further!negotiation;!
5.! One!or!some!of!several!payees;! constitutes! the! indorsee! the! agent! of! the!
6.! Holder!of!an!office!for!the!time!being.! indorser!
! !
! Rights!of!restrictive!indorsee!
Omissions(and(provisions(that(do(not(affect( 1.! To!receive!payment!of!the!instrument!
negotiability( 2.! To! bring! any! action! thereon! that! the!
indorser!could!bring!
!
3.! To! transfer! his! rights! as! such! indrosee!
The! validity! and! negotiable! character! of! an!
where! the! form! of! the! indorsement!
instrument!are!not!affected!by!the!fact!that:!
authorizes!him!to!do!so!
1.! It!is!not!dated;!!
!
2.! Does! not! specify! the! value! given! or! that!
any!value!had!been!given!therefor;! Holder(in(due(course(
3.! Does! not! specify! the! place! where! it! is! !
drawn!or!the!place!where!it!is!payable;! Holder!–!the!payee!(or!bearer)!or!indorsee!of!a!note!
4.! Bears!a!seal;! or!bill!who!is!in!possession!or!the!bearer!thereof!
5.! Designates! a! particular! kind! of! current! !
money!in!which!payment!is!to!be!made;! Who(is(a(holder(in(due(course((COGoN)?((
6.! Addressed! to! more! than! one! drawee! A! holder! in! due! course! is! a! holder! who! has! taken!
jointly! the!instrument!under!the!following!conditions:!
! 1.! That! it! is! complete! and! regular! upon! its!
( face;!
Negotiation( 2.! That! he! became! the! holder! of! it! before! it!
was!overdue,!and!without!notice!that!it!has!
!
been! previously! dishonored,! if! such! was!
An! instrument! is! negotiated! when! it! transferred!
the!fact;!
from!one!person!to!another!in!such!manner!as!to!
3.! That!he!took!it!in!good!faith!and!for!value;!
constitute!the!transferee!the!holder!thereof.!
4.! That!at!the!time!it!was!negotiated!to!him,!
1.! If!payable!to!bearer,!it!negotiated!by!mere!
he! had! no! notice! of! any! infirmity! in! the!
delivery.!
instrument! or! defect! in! the! title! of! the!
2.! If!payable!to!order,!it!is!negotiated!by!the!
person!negotiating!it!(sec.!51)!
indorsement! of! the! holder! completed! by!
!
delivery.!
Rights(of(a(holder(in(due(course((HERS)(
!
A!holder!in!due!course:!
Note:!A!bearer!instrument!will!always!be!a!bearer!
1.! Holds!the!instrument!free!from!any!defect!
instrument.!
of! title! of! prior! parties! and! free! from!
!
defenses! (personal! defenses! only)!
Indorsement( available! to! prior! parties! among!
! themselves;!
Where(placed( 2.! May! enforce! payment! of! the! instrument!
1.! On!the!instrument!itself;!or!! for! the! full! amount! thereof! against! all!
2.! Allonge!(separate!piece!of!paper!attached! parties!liable!thereon;!
to!the!instrument)! 3.! May!receive!payment!and!if!payment!is!in!
! due!course,!the!instrument!is!discharged;!
Note:! and!!

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 QUICKIE NOTES NEGOTIABLE INSTRUMENTS LAW

4.! May! sue! on! the! instrument! in! his! own! ! Conditional!delivery!of!
name! complete!instrument!
! !
Who(is(a(holder(not(in(due(course?( Real% or% absolute% defenses! are! available! against! all!
A! holder! of! an! instrument! payable! on! demand! holders,!whether!in!due!course!or!not,!but!only!by!
negotiated!on!an!unreasonable!length!of!time!after! the!party!or!parties!entitled!to!raise!them.!Personal%
its!issue!(sec.!53)! or%equitable%defenses!are!available!only!against!the!
! holder!who!stands!in!privity!with!the!party!who!is!
Rights(of(a(holder(not(in(due(course( entitled! to! set! up! or! those! who! are! not! or! do! not!
A!holder!not!in!due!course:! have!the!rights!of!holder!in!due!course.!
1.! May! sue! on! the! instrument! in! his! own! !
name;! !
2.! May!receive!payment!and!if!the!payment!is! Forgery(
in! due! course,! the! instrument! is! !
discharged;! How(forgery(is(done(
3.! Holds!the!instrument!subject!to!the!same! 1.! Signature!is!forged!
defenses!as!if!it!were!nonPnegotiable;! 2.! Signature!is!made!without!the!authority!of!
4.! But!a!HNDC!who!derives!his!title!through!a! the!person!whose!signature!it!purports!to!
holder! in! due! course! and! who! is! not! be!
himself! a! party! to! any! fraud! or! illegality! !
affecting!the!instrument,!has!all!the!rights! Effects(of(forgery((WhoRePGivEn)(
of! such! former! holder! in! respect! to! the! 1.! Signature!is!wholly!inoperative!
parties!prior!to!the!latter! 2.! No!right!to!retain!the!instrument!
! 3.! No!right!to!give!a!discharge!therefor!
! 4.! No! right! to! enforce! payment! thereof!
Defenses( against!any!party!thereto!
! !
Real( Personal( Note:!
MVPMUFFINPPWD( 4FPMATINDIC( 1.! Only! the! forged! signature! is! wholly!
Minority! Failure! or! absence! of! inoperative! not! the! instrument! itself,! and!
consideration! not!the!genuine!signatures.!
Vicious! force! or! Fraud!in!inducement! 2.! In!case!of!forgery!of!an!indorsement!of!an!
violence! instrument! payable! to! order,! the! person!
Material!alteration! Filling!up!blank!within! whose! signature! was! forged! and! prior!
authority! parties!to!such!person!are!liable.!Payment!
Ultra! vires! acts! of! a! Filling! up! blank! under!such!a!forged!indorsement!is!not!to!
Corporation! beyond! reasonable! the!drawer’s!order.!
time! 3.! The! following! are! precluded! from! setting!
Fraud! in! factum! or! in! Mistake! up!forgery!as!defense:!
esse!contractus! a.! Those!who!warrant!like!the!acceptors,!
Forgery! AntePdating! or! postP indorsers;!
dating! for! illegal! or! b.! Those! who! ratified! the! forgery,!
fraudulent!purpose! express!or!implied;!and!!
Illegality! Transfer! in! breach! of! c.! Those!who!were!negligent.!
faith! !
NonPdelivery! of! Insertion! of! wrong! !
incomplete! date! Material(Alteration(
instrument! !
Prescription! NonPdelivery! of! Definition(
complete!instrument! Any! alteration! which! changes! the! date,! sum!
Want!of!authority! Duress!or!intimidation! payable,! time! or! place! of! payment! or! relation! of!
Discharge! in! Illegal!consideration! parties,!or!medium!or!currency!of!payment,!or!adds!
insolvency! a! place! of! payment! where! none! is! specified! or!

databril2017 3
 QUICKIE NOTES NEGOTIABLE INSTRUMENTS LAW

which! alters! the! effect! of! the! instrument! in! any! and! proper!
respect! proceedings!
! are! brought,!
Effect(of(Material(Alteration( he! will! pay! to!
Avoids!the!instrument,!except!as!against!the!party! the! party!
who!made,!authorized,!or!assented!to!the!alteration! entitled! to! be!
and! subsequent! indorsers.! HDC! can! enforce! it! paid!
according!to!its!original!tenor.! Drawee! or! 1.!engages!to!pay! None!
! Acceptor! according! to! the!
! tenor! of! his!
Fraud( acceptance;!
! !
1.! Fraud!in!execution!(in!factum)!–!a!person! 2.! admits!
is! induced! to! sign! an! instrument! not! existence! of! the!
knowing!its!character!as!a!note!or!bill!(real! drawer,! the!
defense)! genuineness! of!
2.! Fraud! in! inducement! –! person! who! signs! his!signature!and!
intends! to! sign! the! same! as! a! N.I.! but! his! capacity! and!
induced! to! sign! the! instrument! through! authority!to!draw!
fraud!(personal!defense)! the!instrument!
! !
! 3.! admits! the!
Liabilities(of(Parties(to(a(NI( existence! of! the!
payee! and! his!
!
capacity! to!
! Primary( Secondary(
indorse!
Maker!! a.! To! pay! None!
!
according! to! the!
How(to(enforce(liability(
tenor! of! the!
Primary!liability!
instrument!
1.! the! maker! is! liable! he! moment! he! makes!
b.! admits! the!
the!instrument,!that!he!engages!to!pay!the!
existence! of! the!
instrument!according!to!its!tenor.!
payee! and! his!
2.! A! drawee! becomes! liable! the! moment! he!
capacity! to!
accepts!the!instrument,!that!he!engages!to!
indorse!
pay!it!according!to!its!tenor!(Acceptor).!
Drawer! None!! 1.! admits!
!
existence! of!
Secondary!liability!
payee! and! his!
Promissory%Note%
capacity! to!
1.! Presentment! for! payment! must! be! made!
indorse!
within!the!required!period!to!the!maker.!
!
2.! Notice! of! dishonor! should! be! given,! if!
2.! engages!
promissory! note! is! dishonored! by! nonP
that! the!
payment!by!the!maker.!
instrument!
!
will! be!
Bill%of%Exchange%
accepted! or!
1.! Presentment!for!acceptance!or!negotiation!
paid! by! the!
within! a! reasonable! time! after! it! was!
party!
acquired! –! should! be! made! only! in! the!
primarily!
instances!required!in!sec.!143.!
liable!!
2.! If!dishonored!by!nonPacceptance:!
!
a.! Notice!of!dishonor!should!be!given!to!
3.! Engages!
the!indorsers!and!drawer.!
that! if! the!
b.! If!the!bill!is!a!foreign!bill,!there!must!be!
instrument! is!
protest! for! dishonor! by! nonP
dishonored!
acceptance.!

databril2017 4
 QUICKIE NOTES NEGOTIABLE INSTRUMENTS LAW

3.! If!the!bill!is!accepted:! Presentment! for! payment! is! not! necessary! to!

a.! Presentment! for! payment! to! the! charge!persons!primarily!liable.!But!it!is!necessary!
acceptor!should!be!made.! to!charge!persons!secondarily!liable!except:!
b.! If! the! bill! is! dishonored! upon! 1.! As! to! drawer,! where! he! has! no! right! to!
presentment! for! payment,! notice! of! expect! or! require! that! the! drawee! or!
dishonor! must! be! given! to! persons! acceptor!will!pay!the!instrument;!
secondarily!liable.! 2.! As!to!indorser,!where!the!instrument!was!
c.! If! the! bill! is! a! foreign! bill,! protest! for! made! or! accepted! for! hi! accommodation!
dishonor! by! nonPpayment! must! be! and! he! has! no! reason! to! expect! that! the!
made!! instrument!will!be!paid!if!presented;!
! 3.! When!dispensed!with!such!as:!
! a.! Where,! after! the! exercise! of!
Indorsers( reasonable! diligence,! presentment!
( cannot!be!made;!
Warranties(of(a(Qualified(Indorser( b.! Where! the! drawee! is! a! fictitious!
Every!person!negotiating!n!instrument!by!delivery! person;!and!
or!by!a!qualified!indrosement!warrants:! c.! By!waiver!of!presentment,!express!or!
1.! That! the! instrument! is! genuine! and! in! all! implied.!
respects!what!it!purports!to!be;!! !
2.! That!he!has!good!title!to!it;! Requisites(of(Presentment(for(Payment(
3.! That! all! prior! parties! had! capacity! to! 1.! Made! by! the! holder,! or! by! some! person!
contract;! authorized! to! receive! payment! on! his!
4.! That! he! has! no! knowledge! of! any! fact! behalf;!
which! would! impair! the! validity! of! the! 2.! Made! at! a! reasonable! hour! on! a! business!
instrument!or!render!it!valueless! day!on!the!proper!date;!
! 3.! Must!be!at!the!proper!place;!
Warranties(of(a(General(Indorser( 4.! Must!be!to!the!person!primarily!liable!on!
Every!indorser!who!endorses!without!qualification! the!instrument!(or!any!person!found!at!the!
warrants!to!all!subsequent!holders!in!due!course:! place!where!presentment!is!made);!
1.! That! the! instrument! is! genuine! and! in! all! 5.! The! person! entitled! to! present! the!
respects!what!it!purports!to!be;! instrument! for! payment! must! exhibit! the!
2.! That!he!has!good!title!to!it;! instrument!to!the!person!from!whom!the!
3.! That! all! prior! parties! had! capacity! to! payment!is!demanded!and!upon!payment!
contract;! must!be!delivered!to!the!person!paying!it.!
4.! That! the! instrument! is,! at! the! time! of! the! If!not!surrendered!and!cancelled,!there!is!a!
indorsement,!was!valid!and!subsisting! danger!that!it!may!fall!in!the!hands!of!other!
! persons! who! might! claim! rights! over! the!
Accommodation(Party( instrument.!
1.! He!is!one!who!has!signed!the!instrument!as! !
maker,! acceptor,! or! indorser,! without! !
receiving! value! therefor! and! for! the! Presentment(for(Acceptance(
purpose!of!lending!his!name!to!some!other! !
person.! When(Mandatory((PEP)(
2.! He! is! liable! to! holder! for! value,! 1.! Where! the! bill! is! payable! within! fixed!
notwithstanding!such!holder,!at!the!time!of! period! after! sight! or! whenever! necessary!
taking!the!instrument,!knew!him!to!be!only! to!fix!maturity!of!the!instrument;!
an!accommodation!party.! 2.! Where!the!bill!expressly!stipulates!that!it!
! shall!be!presented!for!acceptance;!
! 3.! Where!the!bill!drawn!is!payable!elsewhere!
Presentment(for(Payment( than!at!the!residence!or!place!of!business!
! of!the!drawee!
When(not(necessary( !
When(excused(or(dispensed(with((DeDeCaRe)(

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 QUICKIE NOTES NEGOTIABLE INSTRUMENTS LAW

1.! Delay! in! presenting! instrument! for! Upon! valid! notice! of! dishonor,! immediate! right! of!
payment! cause! by! presentment! for! recourse!against!the!indorser!arises.!It!is!as!if!the!
acceptance! indorser!becomes!primarily!liable!in!the!sense!that!
2.! Drawee! is! dead! or! has! absconded! or! is! a! the!holder!need!not!claim!payment!from!the!person!
fictitious!person! primarily!liable.!
3.! Presentment! cannot! be! made! after! !
reasonable!diligence! Time(to(give(notice(
4.! Acceptance! has! been! refused! on! some! Where!parties!reside!in!same!place!
other!ground! 1.! if! given! at! the! place! of! business! of! the!
! person!to!receive!notice,!it!must!be!given!
! before! the! close! of! business! hours! on! the!
Acceptance( day!following!
! 2.! if! give! at! his! residence,! it! must! be! given!
Requisites(( before! the! usual! hours! of! rest! on! the! day!
1.! The!acceptance!must!be!in!writing! following!
2.! The!written!acceptance!must!be!signed!by! 3.! if!sent!by!mail,!it!must!be!deposited!in!the!
the!drawee! post! office! in! time! to! reach! him! in! usual!
3.! The!drawee!must!assent!to!the!promise!to! course!on!the!day!following!
pay!a!sum!certain!in!money!and!not!by!any! !
other!means.! Where!parties!reside!in!different!place!
! 1.! if!sent!by!mail,!it!must!be!deposited!in!the!
Proof(of(acceptance( post! office! in! time! to! go! by! mail! the! day!
1.! In!the!instrument!(bill)!itself! following!the!day!of!dishonor,!or!if!there!be!
2.! Separate! instrument! (does! not! bind! the! no! mail! at! a! convenient! hour! on! the! last!
acceptor! except! in! favor! of! a! person! to! day,!by!the!next!mail!thereafter!
whom! it! is! shown! and! who,! on! the! faith! 2.! if! given! otherwise! than! through! the! post!
thereof,!receives!the!bill!for!value)! office,! then! within! the! time! that! notice!
! would!have!been!received!in!due!course!of!
When(deemed(accepted( mail!
1.! When!the!bill!was!delivered!to!the!drawee! !
and!the!latter!destroys!the!same! !
2.! When!the!bill!was!delivered!to!the!drawee! Protest(
but! the! latter! refuses! to! return! the! bill! !
accepted!or!nonPacceptance! Definition(
! A!formal!declaration,!drawn!and!signed!by!notary,!
Kinds(of(acceptance( that! the! foreign! bill! has! been! presented! for!
1.! Conditional! acceptance!or!payment!and!that!the!acceptance!or!
2.! Partial! payment!is!refused!
3.! Local! !
4.! Qualified!as!to!time! When(necessary(
5.! Acceptance! of! some,! one! or! more! of! the! 1.! if! a! foreign! bill! has! been! dishonored! by!
drawees!but!not!of!all!! nonPacceptance!
! 2.! if!a!FB!which!was!not!previously!presented!
! for! acceptance! has! been! dishonored! by!
Notice(of(Dishonor( nonPpayment!
! 3.! if! a! stranger! to! a! bill! will! accept! the!
Who(should(give( instrument!for!honor!
1.! Holder! 4.! if! the! bill! was! presented! for! payment! to!
2.! Agent!or!representative!of!the!holder! acceptor!for!honor!or!referee!
3.! any! party! who! may! be! compelled! to! pay! 5.! when!the!bill!is!dishonored!by!the!acceptor!
like!indorsers;! !
4.! agent!of!any!party!who!may!be!compelled! Requisites((NFAPUS)(
! 1.! made!by!a!notary!public!or!any!respectable!
Effect( resident! of! the! place! where! the! bill! is!
dishonored!

databril2017 6
 QUICKIE NOTES NEGOTIABLE INSTRUMENTS LAW

2.! must!be!made!in!front!of!two!witnesses! Requisites((

3.! must! be! annexed! to! the! bill! or! must! 1 !bill! has! been! dishonored! by! nonP
contain!a!copy!thereof! acceptance!
4.! must! be! under! the! hand! and! seal! of! the! 2 !has!been!protest!for!nonPpayment!
notary!making!the!protest! 3 !payment! supra! protest! is! made! by! any!
5.! must!specify!the!following:! person,!even!by!a!party!thereto!
a.! time!and!place!of!presentment;! 4 !payment! is! attested! by! a! notarial! act! of!
b.! the! fact! that! presentment! was! made! honor!
and!the!manner!thereof;! 5 !notarial! ac! must! be! based! on! the!
c.! cause!or!reason!for!protest;!and! declaration! made! by! the! payor! for! honor!
d.! demand! was! made! and! the! answer! or!his!agent!!
given,! or! the! acceptor! or! drawee! !
cannot!be!found! !
! Discharge(
! !
Acceptance(for(Honor( How( may( a( negotiable( instrument( be(
! discharged?(
Definition( 1.! payment! in! due! course! by! or! in! behalf! of!
An!undertaking!by!a!stranger!to!a!bill!after!protest! the!principal!debtor!
for!the!benefit!of!any!party!liable!thereon!or!for!the! 2.! payment! in! due! course! by! the! party!
honor! of! the! person! for! whose! account! the! bill! is! accommodated!
drawn!which!acceptance!inures!also!to!the!benefit! 3.! intentional!cancellation!
of!all!parties!subsequent!to!the!persons!for!whose! 4.! by! any! other! act! which! will! discharge! a!
honor!it!is!accepted!and!conditioned!to!pay! simple!contract!for!the!payment!of!money!
! 5.! when! the! principal! debtor! becomes! the!
Requisites(( holder! of! the! instrument! at! or! after!
1.! bill!must!have!been!protested!for!dishonor! maturity!in!his!own!right!
by!nonPacceptance!or!for!better!security! !
2.! acceptor!for!honor!must!be!a!stranger!and! Payment(in(due(course(
not!a!party!to!the!instrument! Payment! made! at! or! after! the! maturity! of! the!
3.! bill!must!not!be!overdue! instrument,!to!the!holder!thereof!in!good!faith!and!
4.! acceptance! for! honor! must! be! with! the! without!notice!that!his!title!is!defective!
consent!of!the!holder!of!the!instrument! !
! !
Formal(Requisites( Checks(
1.! must!be!in!writing! !
2.! must! indicate! that! it! is! an! acceptance! for! A! check! is! a! bill! of! exchange! drawn! on! a! bank!
honor! payable!on!demand.!
3.! signed!by!the!acceptor!for!honor! !
4.! must! contain! an! express! or! implied! Kinds((
promise!to!pay!money! 1.! cashier’s!check!
5.! accepted!bill!for!honor!must!be!delivered! 2.! certified!check!
to!the!holder! 3.! crossed!check!
! 4.! memorandum!check!
! 5.! traveler’s!check!
Payment(for(Honor( !
! !
Definition( Stopping(Payment(
Payment!made!by!a!person,!whether!a!party!to!the! !
bill! or! not,! after! it! has! been! protested! for! nonP The! drawer! has! the! right! to! order! the! drawee! to!
payment,!for!the!benefit!of!any!party!liable!thereon! stop!payment!of!a!check!and!this!right!flows!from!
or!for!the!benefit!of!the!person!for!whose!account! the!rule!that!the!issuance!of!a!check!by!itself!is!not!
it!was!drawn! an!assignment!of!funds!by!the!drawee.!
! !

databril2017 7
 QUICKIE NOTES NEGOTIABLE INSTRUMENTS LAW

If!a!bank!pays!a!check!after!it!has!been!notified!to!
stop!payment,!it!pays!on!its!own!responsibility!and!
will!not!be!permitted!to!charge!the!account.!
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databril2017 8