Asked by Melissa Washburn on Jun 14, 2024
Verified
What are the requirements of negotiability under the Code? List and briefly summarize them.
Requirements
in a legal or regulatory context, refer to the stipulated conditions or criteria that must be fulfilled or complied with.
Negotiability
Refers to the feature of some financial instruments or documents which allows them to be transferred or assigned from one party to another in a way that the recipient obtains a good title to the instrument.
Code
A system of principles or rules, often in written form, which is established by a particular country, organization, or community for governance.
- Identifying and summarizing the requirements of negotiability as stipulated by the Code.
Verified Answer
(2) Be signed by the maker or drawer. "Signed" can be a signature, "x," thumbprint, rubber stamp, or "any symbol executed or adopted by a party with present intention to authenticate a writing." Location of the signature on the document is unimportant.(3) Be an unconditional promise or order to pay. The payment cannot be based on the occurrence or nonoccurrence of some other event. It must be more than a mere acknowledgment of an existing debt or an authorization or request for payment. (4) State a specific sum of money. Payment must be for an amount that is "ascertainable from the instrument itself without reference to an outside source." It must be payable in a medium of exchange authorized or adopted by a sovereign government as part of its currency. (5) Be payable on demand or at a definite time. On demand is at sight or on presentment. At a definite time can be
(a) on a stated date or a fixed period after that date,
(b) at a fixed period after sight or acceptance,
(c) at a definite time subject to any acceleration,
(d) at a definite time subject to extension at the option of the holder, or to extension to a further definite time at the option of the maker or acceptor or upon or after a specified act or event. (6) Payable to order or to the bearer. To order is to a specific person, to bearer is the person in possession of the instrument. (7) It must contain no other undertaking or instruction.
Learning Objectives
- Identifying and summarizing the requirements of negotiability as stipulated by the Code.
Related questions
Once an Instrument Is Negotiable, It Remains Negotiable
Once Negotiable, an Instrument Remains Negotiable but a Restrictive Endorsement ...
A Party Cannot Be a Holder in Due Course of ...
For Negotiation, ________ Requires Only Delivery of the Instrument to ...
For Negotiation, Which of the Following Types of Paper Require ...