LAW 603 Chapter Notes - Chapter 14: Certified Check, Bearer Instrument, Negotiable Instrument
27 Nov 2017
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Law 603 chapter 14: special contracts (negotiable instruments) Negotiable instruments consists of a contract that contains an obligation to pay money (a cheque) Differences between a contract and a negotiable instrument. Consideration: the requirement of consideration is more easily satisfied in the case of a cheque, consideration twice, once for the sale contract and second for the cheque. Privity: anyone who holds a cheque can sue on it. It can improve as it is passed from one person to the next. Negotiable instrument represents a compromise between a simple contract and money. More valuable than a simple contract because it is negotiable. Carries the major risk that is associated with every contract non performance. The bills of exchange act applies to 3 types of negotiable instruments: cheques, bills of exchange, and promissory notes. Cheques created when a person orders a bank to pay a specific amount of money to someone. Drawer person who creates the cheque.
