Asked by Willie Alfaro Mora on Jun 10, 2024
Verified
Identify which of the following meet the Article 3 negotiability requirement of being payable at a definite time:
(a) A note payable "on or before June 14, 2021."
(b) A dated instrument payable "30 days after date."
(c) An undated instrument payable "30 days after date."
(d) An instrument payable "when Baxter is promoted to plant manager."
(e) A note payable on December 31, subject to acceleration by the holder."
(f) A note granting the holder the option to extend maturity of the instrument for an indefinite period.
Article 3 Negotiability
The section of the Uniform Commercial Code that governs the negotiation and enforcement of negotiable instruments, such as checks or promissory notes.
Payable
Referring to money that is owed by one party to another and should be paid according to terms specified in a contract or agreement.
Definite Time
A specific and set period or moment that is clearly defined or determined.
- Grasping the criteria for the negotiability requirement being payable at a definite time under Article 3.
Verified Answer
(e), and (f) are instruments payable at a definite time. In (a), the instrument is payable at a definite time since it is payable on or before a stated date. In (b), the instrument is payable at a definite time since its exact maturity date can be determined by simple math. In (c), the instrument is not payable at a definite time because the date of payment cannot be determined from the instrument's face. In (d), the instrument is payable only upon an event whose time of occurrence is uncertain, so it is not payable at a definite time. In
(e), an instrument payable at a fixed time subject to acceleration by the holder satisfies the requirement of being payable at a definite time. In (f), a provision in an instrument granting the holder an option to extend the maturity of the instrument for a definite or an indefinite period does not impair its negotiability.
Learning Objectives
- Grasping the criteria for the negotiability requirement being payable at a definite time under Article 3.
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