LAW 603 Lecture Notes - Lecture 6: Secondary Liability, No Liability, Fairy

• School: Ryerson University
• Department: Law and Business
• Course: LAW 603
• Professor: Peter Wilson

Document Summary

Negotiable instrument -> conceptually somewhere between a contract and money. Like a contract -> an obligation by one party to another party to pay money; a binding promise that cash will be forthcoming. Not like a contract (i. e. rules that normally govern (cid:272)o(cid:374)t(cid:396)a(cid:272)ts do(cid:374)"t appl(cid:455) i(cid:374) the sa(cid:373)e (cid:449)a(cid:455)(cid:895): consideration -> something of value must be given in exchange for it. Usual rule: consideration (i. e. a promise to pay) cannot be provided more than once for the same transaction. However, the promise to honour a cheque, promissory note or bill of exchange is the same consideration given for the transaction for which the cheque, promissory note, or bill of exchange was issued. You can be sued if either the cheque bounces or for breaking the contract to pay the money but not for both. Signing a cheque is the same consideration as signing a contract since they are the same consideration.