BUS 410 Study Guide - Midterm Guide: Negotiable Instrument, Bearer Instrument, Promissory Note
29 Mar 2016
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Two types of negotiable instruments: drafts and promissory notes (book notes about negotiable instruments) Formal contract contracts that require a special form or method of creation (ex: negotiable instruments) A document guaranteeing the payment of a specific amount of money, either on demand or at a set time, with the payer named on the document. 2 types of negotiable instruments: (1) orders to pay (drafts: drafts includes both drafts and checks. Time drafts, side or demand drafts, trade acceptances. If the drawee is a bank it"s a check. Doesn"t have to have order language (if it has bearer language) Liable if you write in pencil or leave the check blank. When you endorse it in blank it changes from an order instrument to a bearer instrument. Drawee where the money is coming from, the bank. Payee the person getting the money (2) promises to pay: promissory notes, certificate of deposit (cd, 2-party instrument:
