COMMERCE 4SD3 Lecture Notes - Lecture 8: Negotiable Instrument, Promissory Note, Consideration
11 Sep 2018
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Negotiable instruments: negotiable = transferable (in the marketplace, governed by federal bills of exchange act. Instruments = legal documents: sets out certain criteria for a document to be classified as a negotiable instrument, ex. Cheque (most common), promissory note (like a iou), bill of exchange, etc: similarities and differences between assignment and negotiation, negotiation requires, signature, delivery. Exception: bearer form instrument = payable to whoever bears/holds the instrument, ex. Need only delivery no signature required. Becomes a bearer form instrument: special endorsement. Names a new payee: restrictive endorsement payable to d only. Intentionally destroy the negotiability of the instrument but not the instrument: conditional endorsement. Conditional = problematic = should be avoided: qualified endorsement payable to d without recourse. C endorses cheque to d without recourse so d has no recourse to c for bad cheque. Only recourse to a who wrote that cheque. Writing this suggests that you"re not all that confident about how good it is, though.
