The instrument created by Juan is negotiable because it meets the necessary elements required for negotiability. The requirements are as follows:
1. Be in writing - the note is written on a transferrable instrument.
2. Be signed by the maker - Juan's name is in his handwriting, which suffices for being signed.
3. Be an unconditional promise to order to pay - Juan promises to pay unconditionally.
4. State a fixed amount of money - $100 is specific and in U.S. currency.
5. Be payable on demand or at a definite time - it is payable on demand.
6. Be payable to order or to bearer - it is payable to Kathy or bearer.
It is a document consisting of unconditional promise and guaranteeing of payment of a certain amount of money on demand or predetermined date or time.
Examples of some of the negotiable instruments are as follows:
Bills of exchange and
The requirements of the negotiable instrument are as follows:
1. Be in written format.
2. Be signed by the maker.
3. Be an unconditional promise to order to pay.
4. State a fixed amount of money for payment.
5. Payable on demand or at a definite time.
6. Payable to order or to bearer.
In this case, of Mr. W and Mr. R, the instrument is non-negotiable because it does not meet the necessary elements of the negotiability. In specific to the case the note does not meet the following requirements is as follows:
1. The note is not signed, nor does it entitle the name of the maker.
2. The note is conditional upon the sale of a horse.
3. The note does not state a fixed amount of money (interest is not specified, nor an method for calculation)
4. The note is not payable at a definite time or on demand.
Therefore, it is not a negotiable instrument, as the paper does not satisfy the requirements of the negotiable instruments.
Payable on Demand:
In the case of Reger Development, LLC v. National City Bank , 592 F.3d 759 (2010) the District Court dismissed the breach of contract claim filed by Reger. The Court of Appeals affirmed.
Where it is generally held that good faith is implied into every contract absent express disavowal, the duty to act in good faith does not apply to lenders seeking payment on demand notes. Good faith does not apply to demand instruments whose nature permits call at any time with or without reason.
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