Exam 4

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Exam 4
2010-07-31 10:17:57
Business Law Exam

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  1. Acceptor
    person who agrees to pay a draft
  2. allonge
    paper so firmly attached to insturment as to be part of it
  3. alteration
    unauthorized change or completion of negotiable insturment to modify obligation of a party
  4. bad check
    check the drawee bank refuse to pay
  5. bank draft
    (teller's check) check drawn by one bank on another
  6. bearer paper
    commercial paper payable to bearer
  7. bond
    sealed, written contract obligation with essentials of note
  8. cancelation
    act that indicates intention to destroy validity of an insturment
  9. certificate of deposit (CD)
    acknowledgement by bank of receipt of money with engagement to repay it
  10. check
    draft drawn on a bank & payable on demand
  11. collateral note
    note secured by personal property
  12. coupon bond
    bond with detachable individual coupons representin intrest payments
  13. dishonor
    presentment made, but acceptance or payment not made
  14. draft (bill of exchange)
    written order by one person directing another to pay sum of money to thrid person
  15. drawee
    person ordered to pay draft
  16. drawer
    person who excutes a draft
  17. fiduciary
    a person in relationship of trust & confidence
  18. holder
    person in possession of instrumen payable to bearer or that person
  19. holder in due course (holder through)
    holder subsequent to holder in due course
  20. hybrid defense
    defind & which ae included
  21. indorsement
    signature of holder on back of insturments with any directions or limitations
  22. indorser
    payee or holder who signs back of instrument
  23. limited defense
    defined & which are included
  24. maker
    person who executes a note
  25. money order
    insturment issued by business indicating payee may receive
  26. negotiable insturment (commercial paper)
    writting drawn in special form that can be transfered as substitutes for money or as insturment of credit
  27. negotiation
    act of transfering ownersip
  28. order paper
    commercial paper payableto order
  29. payee
    party to whom insturment is payable
  30. presentment
    the demand for acceptance made upon the maker
  31. primary liability
    liability without conditions for commercial paper that is due
  32. promissory note
    unconditional written promise to pay sum of money to another
  33. registered bond
    bond payable to specific person, whose name is recorded by issuer
  34. renunciation
    unilateral act of holder giving up rights in the instrument or against a party to it
  35. setoff
    a claim by the party being sued against the party suing
  36. trade acceptance
    draft drawn by seller on purchaser of goods
  37. universal defense includes
    • minority
    • forgery
    • fraud as to the nature of the instrument or its essential terms
    • discharge in bankruptcy proceedings
  38. voucher check
    check with voucher attached
  39. Other types of checks
    cashier's check, certified check, stale check
  40. cashiers check
    check drawn by bank on its own funds
  41. certified check
    check accepted by banks writing certified on it
  42. stale check
    check presented more than six months after its date
  43. Requirements for negotiability
    • instrument must be in writing & signed by the party executing it
    • instrument must contain either an order to pay or a promise to pay
    • order or the promise must be unconditional
    • instrument must provide for the payment of a fixed amount of money
    • instrument must be payable either on demand or at a fixed or definite time
  44. types of drafts
    inland, foreign, sight
  45. inland drafts
    draft drawn & payable in the United States
  46. foreign drafts
    drafts outside of the US
  47. sight drafts
    draft payable on presentation by holder
  48. types of indorsements
    blank, restrictive, qualified, special
  49. blank indorsement
    indorsement consisitng of signature of indorser
  50. restricitive indorsement
    indorsement that restrict use of instrument
  51. qualified indorsement
    indorsement that limits liability of indorser
  52. special indorsement
    indorsement that designates particular person to whom payment is to be made
  53. classification of defenses
    • 1. ordinary contract defenses
    • 2. fraud that induced the execution of the insturment
    • 3. conditional delivery
    • 4. impropercompletion
    • 5. payment or part payment
    • 6. nondelivery
    • 7. theft