LAW 122 Chapter 14: Chapter 14- Negotiable Instruments.docx

• School: Ryerson University
• Department: Law and Business
• Course: LAW 122
• Professor: Theresa Miedema

Document Summary

Negotiable instrument: consists of a contract that contains an obligation to pay money. A cheque is a type of contract that is intended to eventually result in the payment of money. Many of the rules that normally govern contracts do not apply in the same way to negotiable instruments. Here are three important differences: consideration- in contracts, consideration normally cannot consist of a promise to perform an obligation that is already owed to the same party. This rule does not apply to cheques: privity- anyone who holds a cheque can sue on it, assignment- pg. A negotiable instrument must tell a complete story. An order by one party (drawer that directs a bank (drawee) to provide money to someone (payee) An order by one party (drawer) that directs another party who may or may not be a bank (drawee) to provide money to someone (payee) Identify parties: signed and written, certain sum of money, time of payment.