Contemporary Business Law Study Set 1
Quiz 20 :
Creation and Transfer of Negotiable Instruments
Yes , the promissory note in the given case is considered as the negotiable instrument. As per Code Section 3302, the one who considers negotiable instrument is believed as a due course holder for the amount, in good faith and irrespective of notice that is dishonoured or overdue to the enforcement. According to the court, there is no matter to different personal defences proclaimed by Mr B.
, the check is not considered as a negotiable instrument because it is not clear that the draft payments are based on delivery of an actual title to automobile. The words, "ENCLOSED-TITLE ON 77 CHEV. VETT. FREE OF ALL LIENS AND ENCUMBRANCES," are taken as a mere description of envelope contents. The payment on the draft is not shown conditional. Hence, the court should not take the instrument as negotiable.
, the court has considered the note as demand note in the given situation because the plaintiff never settled that the interest should be increased. The plaintiff was supposed to clear his monthly instalments and in case there is a lap in any agreement term, the bank could ask for this payment immediately. Any instrument that is payable on demand are those that are payable on presentation or at sight and the one on which the payment time is unstated.