Quiz 24: International and Space Law
Negotiable Instruments: 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: Promissory note Bills of exchange and Demand draft 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.
The note that the D signed is the promissory note i.e. promise to pay. Promissory note is a promise to pay certain sum which is made by one person to another in writing. It is a simple note contained definite time and sum payable on demand whereas in an order to pay an order directs a third party to pay the instrument as drawn. In a promissory note there will always be two parties. In this case, D borrowed the fund from the bank and signed a note in which it is a promise to pay back that fund.
Negotiability: 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.