This document discusses key concepts related to holders in due course, defenses, and liabilities for negotiable instruments. It defines what makes someone a holder in due course and provides the protections this status grants. Personal defenses that cannot be used against a holder in due course are outlined. Real or universal defenses that can be used against any holder are also defined. The document explains primary and secondary liability for different parties involved in negotiable instruments.
This document outlines key concepts regarding bank-depositor relationships and the check collection process. It discusses the duties of both banks and depositors, including a bank's duty to honor checks and protect funds. The document also describes the check collection process, defining terms like depositary bank, payor bank, and intermediary bank. It explains laws governing checks, like the Check 21 Act, which allows for electronic check processing and substitute checks. The Electronic Funds Transfer Act and consumer protections for electronic banking are also summarized.
This document provides an overview of key concepts regarding holders in due course and defenses from Chapter 26 of the 6th edition of the textbook "Business Law". It defines the different statuses parties can have regarding negotiable instruments such as assignee and holder in due course. It outlines the requirements to qualify as a holder in due course including taking the instrument for value, in good faith, and without notice of any claims or defenses. It distinguishes between personal defenses that can be asserted against a holder in due course versus real defenses that can be asserted against any holder. It also discusses exceptions to holder in due course protections provided to consumers.
Chapter 32 – Negotiation and Holder in Due CourseUAF_BA330
This document provides a 3-page summary of key concepts related to negotiation and holders in due course of negotiable instruments. It begins by explaining the process of transferring negotiable instruments from one person to another, distinguishing between order paper and bearer paper. It then discusses the requirements for negotiation, types of endorsements, and effects of endorsement. The summary concludes by outlining the requirements to achieve holder in due course status and the rights and limitations of a holder in due course.
Chapter 32 – Negotiation and Holder in Due CourseUAF_BA330
The document discusses negotiable instruments, negotiation, holders in due course, and liability of parties. It covers topics like requirements for negotiation, types of endorsements, holders in due course status and rights, defenses, and issues around consumer protection.
This chapter discusses the liability of parties involved in negotiable instruments. It explains the differences between primary and secondary liability and outlines warranties made during the transfer and presentment of negotiable instruments. The chapter also discusses exceptions to normal liability rules, discharge of liability, and key court cases related to liability for negotiable instruments.
Chapter 27:Liability of Parties to Negotiable InstrumentsTara Kissel, M.Ed
This document provides an overview of liability for parties involved in negotiable instruments. It discusses the liability of primary parties like makers and acceptors, as well as secondary parties like drawers and endorsers. Secondary parties have conditional liability that requires conditions like presentment, dishonor, and notice of dishonor to be met. Exceptions, defenses, and ways liability can be discharged are also covered. The learning objectives are to understand the different capacities and liabilities of those involved in negotiable instruments.
This document provides an overview of negotiable instruments under Indian law. It defines negotiable instruments as credit instruments that can be transferred like cash. The key types of negotiable instruments are promissory notes, bills of exchange, and cheques. It outlines the essential features, parties involved, and differences between these instruments. Additionally, it covers related topics like crossing of cheques, endorsements, and classifications of negotiable instruments under Indian law.
This document outlines key concepts regarding bank-depositor relationships and the check collection process. It discusses the duties of both banks and depositors, including a bank's duty to honor checks and protect funds. The document also describes the check collection process, defining terms like depositary bank, payor bank, and intermediary bank. It explains laws governing checks, like the Check 21 Act, which allows for electronic check processing and substitute checks. The Electronic Funds Transfer Act and consumer protections for electronic banking are also summarized.
This document provides an overview of key concepts regarding holders in due course and defenses from Chapter 26 of the 6th edition of the textbook "Business Law". It defines the different statuses parties can have regarding negotiable instruments such as assignee and holder in due course. It outlines the requirements to qualify as a holder in due course including taking the instrument for value, in good faith, and without notice of any claims or defenses. It distinguishes between personal defenses that can be asserted against a holder in due course versus real defenses that can be asserted against any holder. It also discusses exceptions to holder in due course protections provided to consumers.
Chapter 32 – Negotiation and Holder in Due CourseUAF_BA330
This document provides a 3-page summary of key concepts related to negotiation and holders in due course of negotiable instruments. It begins by explaining the process of transferring negotiable instruments from one person to another, distinguishing between order paper and bearer paper. It then discusses the requirements for negotiation, types of endorsements, and effects of endorsement. The summary concludes by outlining the requirements to achieve holder in due course status and the rights and limitations of a holder in due course.
Chapter 32 – Negotiation and Holder in Due CourseUAF_BA330
The document discusses negotiable instruments, negotiation, holders in due course, and liability of parties. It covers topics like requirements for negotiation, types of endorsements, holders in due course status and rights, defenses, and issues around consumer protection.
This chapter discusses the liability of parties involved in negotiable instruments. It explains the differences between primary and secondary liability and outlines warranties made during the transfer and presentment of negotiable instruments. The chapter also discusses exceptions to normal liability rules, discharge of liability, and key court cases related to liability for negotiable instruments.
Chapter 27:Liability of Parties to Negotiable InstrumentsTara Kissel, M.Ed
This document provides an overview of liability for parties involved in negotiable instruments. It discusses the liability of primary parties like makers and acceptors, as well as secondary parties like drawers and endorsers. Secondary parties have conditional liability that requires conditions like presentment, dishonor, and notice of dishonor to be met. Exceptions, defenses, and ways liability can be discharged are also covered. The learning objectives are to understand the different capacities and liabilities of those involved in negotiable instruments.
This document provides an overview of negotiable instruments under Indian law. It defines negotiable instruments as credit instruments that can be transferred like cash. The key types of negotiable instruments are promissory notes, bills of exchange, and cheques. It outlines the essential features, parties involved, and differences between these instruments. Additionally, it covers related topics like crossing of cheques, endorsements, and classifications of negotiable instruments under Indian law.
Chapter 34 – Checks and Electronic TransfersUAF_BA330
This document provides an overview of checks and electronic funds transfers. It discusses the relationship between depositors and banks, the bank's duties regarding payment and collection of checks, stop-payment orders, certified checks, cashier's checks, and issues related to forged, altered and stale checks. It also covers laws governing electronic funds transfers, check collection, funds availability, and wire transfers. Key points covered include a bank's liability for wrongful dishonor of checks and its right to charge properly payable checks, as well as obligations of both banks and customers regarding timely reporting of unauthorized transactions or errors.
The document discusses the roles and responsibilities of a collecting banker when handling cheque collections. It outlines that a collecting banker can act either as a holder for value or as an agent of the customer. As a holder for value, the collecting banker enjoys rights similar to a holder in due course. As an agent, the banker must take precautions to avoid liability for conversion. The document also discusses the statutory protection provided to collecting bankers under Section 131 of the Negotiable Instruments Act if they collect payment in good faith and without negligence. It provides examples of negligence and outlines various duties and precautions collecting bankers must follow.
This document provides an overview of banking law and operations. It defines key terms like bank, banker, and banking. It describes the characteristics and functions of banks, including their primary functions of accepting deposits and granting credit, as well as subsidiary functions like buying/selling securities. The document defines customer and explores the general and special relationships between bankers and customers. It examines obligations like honoring checks, maintaining secrecy, and following customer directions. The document concludes by outlining some rights and duties of bankers, such as the right of lien and the right to charge interest.
This document provides an overview of various banking operations including the roles of collecting and paying bankers, types of lending facilities, and non-performing assets. It discusses the duties of collecting bankers to carefully collect checks and notify customers of dishonored checks. Paying bankers must take precautions when honoring checks and can refuse payment for specific reasons. Banks offer various lending facilities like loans, cash credits, overdrafts and letters of credit. Non-performing assets are loans where borrowers do not repay principal or interest for a certain period.
This document provides an overview of negotiable instruments including their purpose and key types. It defines a negotiable instrument as a written and signed document containing an unconditional promise or order to pay a fixed sum of money. The main types discussed are promise instruments like notes and certificates of deposit, and order instruments like drafts/bills of exchange and various types of checks. The document also covers the requirements for an instrument to be negotiable, parties to instruments, transferring instruments through assignment and negotiation, and types of endorsements.
This document provides an introduction and overview of negotiable instruments under Indian law. It defines key terms like negotiable instrument, bill of exchange, promissory note, and cheque. It outlines the main objectives and features of the Negotiable Instruments Act of 1881. Examples of negotiable instruments are given and the essential features like writing, money, transferability etc. are summarized. Different types of negotiable instruments like accommodation bills, fictitious bills, inland vs foreign instruments are also defined. The document classifies and explains the parties and characteristics of bills of exchange, promissory notes, and cheques. Crossing of cheques and different bank drafts are briefly covered.
The document discusses negotiable instruments and commercial paper. It provides an overview of negotiable instruments, including different types like promissory notes, checks, and certificates of deposit. It also covers key concepts like negotiability, holders in due course, and the Uniform Commercial Code articles that govern commercial paper. Examples are provided of cases involving ambiguous terms in negotiable instruments.
Negotiable instruments include promissory notes, bills of exchange, and cheques. They are written documents that entitle the holder to payment of a sum of money. They are transferable by delivery or endorsement and delivery, which transfers ownership and the right to payment. The three main types are promissory notes, which contain an unconditional promise to pay; bills of exchange, which contain an order to pay; and cheques, which are drawn on a bank and payable on demand. For an instrument to be negotiable, it must be in writing, for a definite sum of money, and unconditionally promise or order payment on demand or at a future date.
This document discusses different types of presentment required under negotiable instruments law. It covers (1) presentment for acceptance of bills of exchange, including to whom bills can be presented, time and place requirements, and effects of non-presentment; (2) presentment of promissory notes payable at sight; (3) presentment for payment of promissory notes, bills of exchange and cheques, including requirements for instruments payable on demand or at a future date; and (4) presentment of cheques to charge the drawee bank, including presentation of truncated cheques.
The document discusses key aspects of negotiable instruments under the Negotiable Instruments Act of 1881 in India. It covers:
1) The main types of negotiable instruments like promissory notes, bills of exchange, and cheques. It explains their essential elements and differences.
2) Key parties to negotiable instruments like drawers, drawees, makers, payees, holders, and endorsers. It also discusses capacities of different parties.
3) Important concepts like crossing of cheques, classification of instruments, presumption of consideration, and distinction between payment in due course vs other payments.
4) The characteristics and requirements to qualify as a holder in due course, who has additional rights
Critical study of dishonour of cheques under negotiable instruments act,1881merenjithr
The document discusses key provisions and amendments to the Negotiable Instruments Act of 1881 regarding dishonour of cheques, including definitions of offenses, requirements for prosecution, and important case law interpretations from the Supreme Court of India that have clarified ambiguities in the Act. It examines issues such as jurisdiction, successive cheque presentations, legally enforceable debts, notice requirements, and the liability of company directors. The overall objective of the Act and amendments is to encourage the use of cheques and enhance their credibility by penalizing dishonored cheques.
Documentary Credit means any arrangement that is irrevocable and thereby constitutes a definite undertaking of the issuing bank to honour a complying presentation
http://accountsknowledgehub.blogspot.com/
The document discusses different types of bankruptcy proceedings including Chapter 7 liquidations, Chapter 11 reorganizations, and Chapters 12 and 13 for family farms and consumer debt adjustments. It explains the process for filing bankruptcy, the automatic stay of creditor actions, how claims are handled, trustee duties in distributing assets and developing reorganization plans, and issues around discharge of debts and dismissal for abuse. Key cases discussed include In re Rogers regarding homestead exemptions and In re Made In Detroit regarding plan feasibility for confirmation.
Chapter 28 – Introduction to Credit and Secured TransactionsUAF_BA330
This document provides an overview of secured and unsecured credit transactions. It defines secured credit as transactions where the creditor requires the debtor to convey a lien or security interest on their property to minimize the creditor's risk of loss. It differentiates suretyship from guaranty as security devices. It also describes various types of liens that can be placed on real and personal property to secure credit obligations.
These slides contain information regarding the Meaning, Essentials, Parties and Liabilities of the parties to Negotiable Instruments under the Negotiable Instruments Act,1881.
In this presentaion concept of negotiable instrument, types of negotiable instrument, holder and holder in due course, endorsement , how endorsement is done, kinds of endorsement insturment obtain by unlawful means and dishonor is included.
The document discusses the Negotiable Instruments Act of 1881 and defines key concepts related to negotiable instruments such as bills of exchange, cheques, promissory notes, holders, holders in due course, negotiation, endorsement and types of endorsement. It provides examples and explanations of these terms and concepts. The document is intended to educate about the legal definitions and principles governing negotiable instruments in India.
Red clause letters of credit originated as a means of providing sellers financing for purchases or production of goods. They allowed sellers to receive advances from the issuing or confirming bank before shipment using the letter of credit as collateral. While once common, red clause credits are now rarely used, being largely replaced by other forms of financing. Recent cases discuss liability and remedies under these historical letters of credit, but they remain mostly a thing of the past, confined now to only occasional or niche uses.
The document discusses negotiation and endorsement of negotiable instruments under the Negotiable Instruments Act. It defines negotiation as transferring a negotiable instrument like a promissory note, bill of exchange, or cheque to another person to make them the holder. Negotiation can occur through delivery alone if the instrument is payable to bearer, or through endorsement and delivery if payable to order. Endorsement involves signing the instrument to transfer rights and must be completed by delivery. There are different types of endorsements like blank, special, restrictive, and forged.
,
modes of charging
,
modes of charging security
,
different modes of creating charge
,
essentials of pledge
,
documents required for pledge
,
liquid asset
,
different forms of liquid assets
,
supplies of liquid assets
,
demand of assets
1. Commercial paper includes negotiable instruments like notes and drafts that can be transferred between parties.
2. Notes involve a maker promising to pay a payee, while drafts involve a drawer ordering a drawee (usually a bank) to pay a payee.
3. A holder in due course takes the instrument free from personal defenses and claims and can enforce payment from parties like the maker or drawer.
This document discusses negotiation skills and provides information on different types of negotiation. It begins by defining negotiation as an interactive communication process where parties want something from each other and aim to find an agreement. There are three elements of negotiation: process, behavior, and substance. The document then describes two main types of negotiation: distributive and integrative. Distributive negotiation involves parties competing over a fixed resource, while integrative negotiation involves parties cooperating and sharing interests to create value for both sides and reach an optimal agreement. The document provides tips for successfully conducting each type of negotiation.
Chapter 34 – Checks and Electronic TransfersUAF_BA330
This document provides an overview of checks and electronic funds transfers. It discusses the relationship between depositors and banks, the bank's duties regarding payment and collection of checks, stop-payment orders, certified checks, cashier's checks, and issues related to forged, altered and stale checks. It also covers laws governing electronic funds transfers, check collection, funds availability, and wire transfers. Key points covered include a bank's liability for wrongful dishonor of checks and its right to charge properly payable checks, as well as obligations of both banks and customers regarding timely reporting of unauthorized transactions or errors.
The document discusses the roles and responsibilities of a collecting banker when handling cheque collections. It outlines that a collecting banker can act either as a holder for value or as an agent of the customer. As a holder for value, the collecting banker enjoys rights similar to a holder in due course. As an agent, the banker must take precautions to avoid liability for conversion. The document also discusses the statutory protection provided to collecting bankers under Section 131 of the Negotiable Instruments Act if they collect payment in good faith and without negligence. It provides examples of negligence and outlines various duties and precautions collecting bankers must follow.
This document provides an overview of banking law and operations. It defines key terms like bank, banker, and banking. It describes the characteristics and functions of banks, including their primary functions of accepting deposits and granting credit, as well as subsidiary functions like buying/selling securities. The document defines customer and explores the general and special relationships between bankers and customers. It examines obligations like honoring checks, maintaining secrecy, and following customer directions. The document concludes by outlining some rights and duties of bankers, such as the right of lien and the right to charge interest.
This document provides an overview of various banking operations including the roles of collecting and paying bankers, types of lending facilities, and non-performing assets. It discusses the duties of collecting bankers to carefully collect checks and notify customers of dishonored checks. Paying bankers must take precautions when honoring checks and can refuse payment for specific reasons. Banks offer various lending facilities like loans, cash credits, overdrafts and letters of credit. Non-performing assets are loans where borrowers do not repay principal or interest for a certain period.
This document provides an overview of negotiable instruments including their purpose and key types. It defines a negotiable instrument as a written and signed document containing an unconditional promise or order to pay a fixed sum of money. The main types discussed are promise instruments like notes and certificates of deposit, and order instruments like drafts/bills of exchange and various types of checks. The document also covers the requirements for an instrument to be negotiable, parties to instruments, transferring instruments through assignment and negotiation, and types of endorsements.
This document provides an introduction and overview of negotiable instruments under Indian law. It defines key terms like negotiable instrument, bill of exchange, promissory note, and cheque. It outlines the main objectives and features of the Negotiable Instruments Act of 1881. Examples of negotiable instruments are given and the essential features like writing, money, transferability etc. are summarized. Different types of negotiable instruments like accommodation bills, fictitious bills, inland vs foreign instruments are also defined. The document classifies and explains the parties and characteristics of bills of exchange, promissory notes, and cheques. Crossing of cheques and different bank drafts are briefly covered.
The document discusses negotiable instruments and commercial paper. It provides an overview of negotiable instruments, including different types like promissory notes, checks, and certificates of deposit. It also covers key concepts like negotiability, holders in due course, and the Uniform Commercial Code articles that govern commercial paper. Examples are provided of cases involving ambiguous terms in negotiable instruments.
Negotiable instruments include promissory notes, bills of exchange, and cheques. They are written documents that entitle the holder to payment of a sum of money. They are transferable by delivery or endorsement and delivery, which transfers ownership and the right to payment. The three main types are promissory notes, which contain an unconditional promise to pay; bills of exchange, which contain an order to pay; and cheques, which are drawn on a bank and payable on demand. For an instrument to be negotiable, it must be in writing, for a definite sum of money, and unconditionally promise or order payment on demand or at a future date.
This document discusses different types of presentment required under negotiable instruments law. It covers (1) presentment for acceptance of bills of exchange, including to whom bills can be presented, time and place requirements, and effects of non-presentment; (2) presentment of promissory notes payable at sight; (3) presentment for payment of promissory notes, bills of exchange and cheques, including requirements for instruments payable on demand or at a future date; and (4) presentment of cheques to charge the drawee bank, including presentation of truncated cheques.
The document discusses key aspects of negotiable instruments under the Negotiable Instruments Act of 1881 in India. It covers:
1) The main types of negotiable instruments like promissory notes, bills of exchange, and cheques. It explains their essential elements and differences.
2) Key parties to negotiable instruments like drawers, drawees, makers, payees, holders, and endorsers. It also discusses capacities of different parties.
3) Important concepts like crossing of cheques, classification of instruments, presumption of consideration, and distinction between payment in due course vs other payments.
4) The characteristics and requirements to qualify as a holder in due course, who has additional rights
Critical study of dishonour of cheques under negotiable instruments act,1881merenjithr
The document discusses key provisions and amendments to the Negotiable Instruments Act of 1881 regarding dishonour of cheques, including definitions of offenses, requirements for prosecution, and important case law interpretations from the Supreme Court of India that have clarified ambiguities in the Act. It examines issues such as jurisdiction, successive cheque presentations, legally enforceable debts, notice requirements, and the liability of company directors. The overall objective of the Act and amendments is to encourage the use of cheques and enhance their credibility by penalizing dishonored cheques.
Documentary Credit means any arrangement that is irrevocable and thereby constitutes a definite undertaking of the issuing bank to honour a complying presentation
http://accountsknowledgehub.blogspot.com/
The document discusses different types of bankruptcy proceedings including Chapter 7 liquidations, Chapter 11 reorganizations, and Chapters 12 and 13 for family farms and consumer debt adjustments. It explains the process for filing bankruptcy, the automatic stay of creditor actions, how claims are handled, trustee duties in distributing assets and developing reorganization plans, and issues around discharge of debts and dismissal for abuse. Key cases discussed include In re Rogers regarding homestead exemptions and In re Made In Detroit regarding plan feasibility for confirmation.
Chapter 28 – Introduction to Credit and Secured TransactionsUAF_BA330
This document provides an overview of secured and unsecured credit transactions. It defines secured credit as transactions where the creditor requires the debtor to convey a lien or security interest on their property to minimize the creditor's risk of loss. It differentiates suretyship from guaranty as security devices. It also describes various types of liens that can be placed on real and personal property to secure credit obligations.
These slides contain information regarding the Meaning, Essentials, Parties and Liabilities of the parties to Negotiable Instruments under the Negotiable Instruments Act,1881.
In this presentaion concept of negotiable instrument, types of negotiable instrument, holder and holder in due course, endorsement , how endorsement is done, kinds of endorsement insturment obtain by unlawful means and dishonor is included.
The document discusses the Negotiable Instruments Act of 1881 and defines key concepts related to negotiable instruments such as bills of exchange, cheques, promissory notes, holders, holders in due course, negotiation, endorsement and types of endorsement. It provides examples and explanations of these terms and concepts. The document is intended to educate about the legal definitions and principles governing negotiable instruments in India.
Red clause letters of credit originated as a means of providing sellers financing for purchases or production of goods. They allowed sellers to receive advances from the issuing or confirming bank before shipment using the letter of credit as collateral. While once common, red clause credits are now rarely used, being largely replaced by other forms of financing. Recent cases discuss liability and remedies under these historical letters of credit, but they remain mostly a thing of the past, confined now to only occasional or niche uses.
The document discusses negotiation and endorsement of negotiable instruments under the Negotiable Instruments Act. It defines negotiation as transferring a negotiable instrument like a promissory note, bill of exchange, or cheque to another person to make them the holder. Negotiation can occur through delivery alone if the instrument is payable to bearer, or through endorsement and delivery if payable to order. Endorsement involves signing the instrument to transfer rights and must be completed by delivery. There are different types of endorsements like blank, special, restrictive, and forged.
,
modes of charging
,
modes of charging security
,
different modes of creating charge
,
essentials of pledge
,
documents required for pledge
,
liquid asset
,
different forms of liquid assets
,
supplies of liquid assets
,
demand of assets
1. Commercial paper includes negotiable instruments like notes and drafts that can be transferred between parties.
2. Notes involve a maker promising to pay a payee, while drafts involve a drawer ordering a drawee (usually a bank) to pay a payee.
3. A holder in due course takes the instrument free from personal defenses and claims and can enforce payment from parties like the maker or drawer.
This document discusses negotiation skills and provides information on different types of negotiation. It begins by defining negotiation as an interactive communication process where parties want something from each other and aim to find an agreement. There are three elements of negotiation: process, behavior, and substance. The document then describes two main types of negotiation: distributive and integrative. Distributive negotiation involves parties competing over a fixed resource, while integrative negotiation involves parties cooperating and sharing interests to create value for both sides and reach an optimal agreement. The document provides tips for successfully conducting each type of negotiation.
The Negotiable Instruments Act 1881 governs negotiable instruments in India. It defines a negotiable instrument as a document that allows the transfer of a debt from one person to another through delivery or endorsement. The key types of negotiable instruments are promissory notes, bills of exchange, and cheques. A negotiable instrument can be discharged when all rights to payment under it are extinguished, such as through payment, cancellation, release, or expiration of the limitation period.
The document summarizes key aspects of the Negotiable Instruments Act 1881 in India. It defines negotiable instruments as documents that allow the transfer of rights from one person to another. The Act covers three main instruments - promissory notes, bills of exchange, and cheques. It establishes characteristics of negotiable instruments like being freely transferable and the holder having title free of defects. The document also outlines parties, essentials, and types of the three instruments.
The document defines and distinguishes between a holder and a holder in due course of a negotiable instrument under the Negotiable Instruments Act of 1881. [1] A holder is defined as any person entitled to possession of the instrument who has the right to receive payment. [2] A holder in due course must be a holder for valuable consideration, acquire the instrument before maturity, and acquire it in good faith without reason to suspect a defect in title. [3] Key differences between a holder and holder in due course include a holder not needing consideration but a holder in due course requiring valuable consideration, and a holder in due course acquiring protected rights not held by a regular holder.
This document provides information about a team called TEAM-05 and its members AASHISH.J.N, AMOGH.R, ANIRUDDHA.C, DARSHAN.S, and DARSHAN KUMAR.G. It then discusses negotiable instruments under Indian law, including their definition, essential elements of promissory notes, bills of exchange, and cheques. Key points covered include what makes an instrument negotiable, specimens and examples of different types of negotiable instruments, and parties involved like makers, drawers, drawees, payees, holders and holders in due course.
The document discusses the laws around dishonour of negotiable instruments like bills of exchange, promissory notes, and cheques in India. It defines dishonour as non-acceptance or non-payment of obligations. A negotiable instrument can be dishonoured by non-acceptance or non-payment, with different implications for each type of instrument. The holder must give notice of dishonour and may have to get the instrument noted and protested by a notary public to establish liability of prior parties.
The document defines a holder and holder in due course under Indian law. A holder is defined as someone who possesses a negotiable instrument and is entitled to payment. To be a holder in due course, one must pay consideration for the instrument, receive it before maturity in good faith, and have no reason to doubt the title of the person they received it from. Key differences between a holder and holder in due course are that a holder can take possession without consideration, while a holder in due course must provide consideration and receive the instrument before maturity with a clear title.
The document discusses key aspects of negotiable instruments under the Negotiable Instruments Act 1881 in India. It defines negotiable instruments as promissory notes, bills of exchange, and checks. It describes how instruments can be negotiable by statute or usage and the methods and essentials of negotiation, endorsement, and transfer. It also discusses the characteristics, presumptions, types (promissory notes, bills of exchange, checks), crossing and endorsement of negotiable instruments.
Negotiation is a process where two parties try to reach an agreement on mutually acceptable terms to exchange goods or services. It requires flexibility and is a continuous process, not a single event. Effective communication and a win-win outcome for both sides are important. Factors like attitude, time, place, and subjective considerations can influence negotiations. The negotiation process typically involves offers, counteroffers, concessions, compromises, and eventual agreement. Positive attitudes, finding common ground, and understanding the other side are keys to successful negotiations.
Negotiation is a process where parties try to reach an agreement or compromise on issues in dispute. It involves exchanging offers and counteroffers to find mutually acceptable solutions. Effective negotiation requires preparation, understanding both sides' objectives and priorities, developing alternative options, and using strategies like focusing on interests rather than positions to achieve win-win outcomes when possible. Key roles for negotiators include maintaining team unity, understanding the issues, preparing necessary information, seeking compromise, and knowing when to conclude the negotiation. Personality traits alone do not determine outcomes, but both gender and power can influence negotiating style and perceived success.
The document provides an overview of key concepts related to negotiation including:
- Common negotiation tactics like acting crazy, using a prestigious ally, limited authority, and divide and conquer strategies.
- Four phases of negotiation: plan, debate, propose, and bargain.
- Styles of negotiation including accommodating, collaborating, avoiding, competing, and compromising.
- Principles of principled negotiation including separating people from problems, focusing on interests not positions, inventing options for mutual gain, and using objective criteria.
The document discusses various aspects of negotiation including:
1) It describes negotiation as a give-and-take decision making process between two or more parties with different preferences that aims to reach an agreement.
2) Several negotiation skills, concepts, types, processes, tactics and behaviors are outlined such as preparation, exploration, creating movement, and closing. Integrative bargaining that seeks joint gains is emphasized.
3) Key concepts like BATNA, ZOPA and various negotiation tactics like highballing, lowballing, bluffing are defined to understand different approaches in negotiation.
Negotiation is a process of communication between two or more parties to influence each other and reach an agreement. It can involve compromise to benefit both sides. There are two main types of negotiation: distributive negotiation which focuses on fixed resources and competitive goals, and integrative negotiation which aims to find mutually beneficial outcomes through problem solving and addressing underlying interests. Key factors for successful negotiation include thorough planning, understanding different perspectives, ensuring the right stakeholders are represented, and finding possible compromises.
The document summarizes key concepts in creditors' rights and bankruptcy law. It defines secured transactions and how a security interest is created. It also discusses remedies creditors can pursue like prejudgment attachments, writs of execution, and garnishment. The document then covers bankruptcy proceedings, including what constitutes property of the debtor's estate and exempt property. It also discusses the roles of debtors, trustees, and creditors in Chapter 7 liquidation and Chapter 11 reorganization cases.
This document discusses the legal concepts of bailment and pledge. It defines bailment as when the owner of goods gives custody and possession of the goods to another person through a contract, to be returned later. The owner is the bailor and the person receiving the goods is the bailee. There are various types of bailments and rights and duties of both the bailor and bailee. Pledge is a special type of bailment where goods are delivered as security for repayment of a debt, with the pawner being the bailor and pawnee the bailee. The document provides details on the rights and duties of both parties in a pledge, as well as examples of cases involving issues of bailment
The document discusses the concepts of Holder and Holder in Due Course under the Negotiable Instruments Act 1881 in India. It defines a Holder as a person who legally obtains a negotiable instrument, with their name entitled on it, to receive payment. A Holder in Due Course is a Holder who acquires the instrument in good faith, for consideration, before it becomes due, and without knowledge of defective title. Key differences are that a Holder is simply entitled to the instrument, while a Holder in Due Course has stronger legal rights and title. The document outlines the rights and protections afforded to both Holders and Holders in Due Course.
This document outlines key concepts regarding sales contracts, including rights and duties of buyers and sellers, breach of contract, and warranties. It defines tender of performance and outlines what is required for proper tender by buyers and sellers. It also discusses remedies available to buyers and sellers in cases of breach, including cover, damages, and price recovery. The document explains express and implied warranties, including how warranties can be excluded, and key provisions of the Magnuson-Moss Warranty Act regarding consumer protections.
Bailment is a contract where one person delivers goods to another for a specific purpose, with the understanding that the goods will be returned once the purpose is accomplished. Key elements of a bailment include the delivery of movable goods by the bailor to the bailee, without transferring ownership, for a specific purpose. Bailments can be classified based on benefit, willingness, or whether remuneration is provided. Bailors and bailees each have rights and duties - bailors can demand return of goods while bailees must take reasonable care of goods.
This document discusses bailment and pledge under Indian contract law. It defines bailment as the delivery of goods by one person to another for a specified purpose, where ownership remains with the bailor. The key elements of bailment are delivery of goods, no transfer of ownership, delivery for a purpose, and return of the same goods. Bailment can be classified based on benefit and willingness. It also outlines the rights and duties of bailors and bailees. Pledge is defined as a bailment where goods are delivered as security for a debt or promise. The essential elements of pledge and the rights and duties of pawners and pawnees are described. The document also discusses pledge by non-owners such
This document defines bills of exchange and promissory notes under Indian law. It provides key details about the parties involved, features, types and differences between bills of exchange and promissory notes. Bills of exchange require three parties - a drawer, drawee and payee, while promissory notes only require a maker and payee. Bills of exchange must be accepted to be valid, while promissory notes do not require acceptance since the maker is already liable. The document also provides examples of each instrument.
THE NEGOTIALBLE INSTRUMENTS ACT, 1881.pdftarachand1234
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This document discusses bailment and pledge under Indian contract law. It defines bailment as the delivery of goods by one person to another for a specified purpose, where possession but not ownership is transferred. A bailee's duties include taking reasonable care of goods and not making unauthorized use, while a bailor's duties include disclosing known defects. Bailment can be gratuitous or for remuneration. Pledge is a type of bailment where goods are delivered as security for a debt. The document outlines the rights and duties of pawners and pawnees in pledge agreements. It also discusses when non-owners can validly pledge goods.
This document discusses bailment and pledge under Indian contract law. It defines bailment as the delivery of goods by one person to another for a specific purpose, where possession but not ownership is transferred. A bailee's duties include taking reasonable care of goods and not making unauthorized use, while a bailor's duties include disclosing known defects. Bailment can be gratuitous or for remuneration. Pledge is a type of bailment where goods are delivered as security for a debt. The document outlines the rights and duties of pawners and pawnees in pledge agreements. It also discusses different types of bailment and pledge classifications.
The document provides an overview of negotiable instruments under Indian law. It defines key terms like negotiable instrument, promissory note, bill of exchange, cheque, endorsement, holder, and holder in due course. It describes the essential characteristics and requirements for these instruments and roles. It also discusses concepts like negotiation, dishonour, noting, and protest. The document is an educational reference on the basic concepts, definitions, and principles regarding negotiable instruments under the Negotiable Instruments Act of 1881 in India.
This document provides an overview of key concepts regarding legal aspects of real estate finance, including:
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Pledge is the bailment of goods as security for repayment of a debt or performance of a promise. The pledger (bailor) delivers possession of movable property to the pledgee (bailee) as security. The pledgee has the right to retain the goods until repayment of the debt and expenses. The pledger can redeem the goods by repaying the debt within the agreed time or any subsequent time before goods are sold. Duties include the pledgee taking reasonable care of goods and the pledger repaying the debt. A non-owner can also pledge goods in some situations like a mercantile agent pledging with owner's consent.
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The document discusses key concepts related to the law of sale of goods in India such as the definition of a sale contract and agreement to sell, essential elements of a valid sale, passing of property and risk, remedies available to buyers and sellers, conditions and warranties, implied warranties, caveat emptor, rights of unpaid sellers, and remedies for breach of contract.
The document discusses key concepts related to the law of sale of goods in India such as the definition of a sale contract and agreement to sell, essential elements of a valid sale, passing of property and risk, remedies available to buyers and sellers, conditions and warranties, implied warranties, caveat emptor, rights of unpaid sellers, and remedies for breach of contract.
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2. Learning Objectives
1. State the characteristics of being a holder in due
course.
2. Describe the special protection given to a holder
in due course.
3. Define holder.
4. Explain the protection given to a holder through
a holder in due course.
5. Name six personal defenses.
17-2
3. Learning Objectives (cont.)
6. Discuss the protection given to people who sign
consumer credit contracts.
7. Name six real defenses and explain the
significance of a real defense.
8. Explain primary liability.
9. Explain secondary liability.
10.Describe the conditions that must be met to
hold a secondary party liable.
17-3
4. Holder in Due Course
Holder of an instrument if:
1. When issued or negotiated to the holder does not bear
such apparent evidence of forgery or alteration or is not
otherwise so irregular or incomplete as to call into
question its authenticity
2. A holder took the instrument:
– For value
– In good faith
– Without notice that anything is wrong with the
underlying transaction
17-4
5. Holder
• To be a holder in due course, a person must first
be a holder
• The instrument must have been issued or
indorsed to:
– that person
– that person’s order, or
– to bearer
17-5
6. Value
• Value must be given for an instrument for the
person to qualify as a holder in due course
– Giving the consideration agreed upon
– Accepting instruments as payment of debts
• Receiving an instrument as a gift disqualifies one
from being a holder in due course
17-6
7. Good Faith
• Holder must take the instrument in good faith
– Honesty in fact and fair dealing
– Requires that the taker of a commercial instrument
act honestly
• Negligence (not discovering defects with the
instrument) will not necessarily destroy good
faith
17-7
8. Without Notice
• Holder must not have:
– Notice of any claim or defense to an instrument
• Visible evidence of forgery/alteration
• Instrument is incomplete or irregular to the point that it’s
legal acceptance would be cast into doubt
• Knowledge that the obligation of any party is voidable
– Notice that an instrument is overdue or has been
dishonored
• Ex: more than a reasonable amount of time has passed
since it was issued (~90 days for a check)
17-8
9. Holder Through a Holder in Due Course
• Shelter provision
– A holder who receives an instrument from a holder in
due course acquires the rights of the holder in due
course, even if he or she does not qualify as a holder
in due course
– Doesn’t apply to a holder who has committed fraud or
an illegal act
• Designed to permit holders in due course to
transfer all of the rights they have in the paper to
others.
17-9
10. Personal Defenses
• Holders in due course take instruments free
from all personal defenses of any party with
whom they have not dealt
• Personal Defenses (limited defenses)
– defenses that can be used against a holder but not a
holder in due course of a negotiable instrument.
Frank Abignale's warning (pdf)
Frank Abignale’s warning (html)
17-10
12. Personal Defenses
• Breach of contract
– The party to whom the instrument was issued
breaches the contract by failing to perform or by
performing in an unsatisfactory manner
– May not be used against a holder in due course unless
the parties dealt with each other
17-13
13. Personal Defenses
• Lack of consideration
– No consideration existed in the underlying contract
for which the instrument was issued
• Failure of consideration
– The other party breaches the contract by not
furnishing the agreed consideration
17-14
14. Personal Defenses
• Fraud in the Inducement
– Someone is induced by a fraudulent statement to
enter into a contract
• Lack of delivery
– Commercial instruments may be revoked by their
maker or drawer until they have been delivered to the
payee
– If a payee takes an instrument forcibly, unlawfully, or
conditionally, defense of lack of delivery may be used,
but not against holder in due course
17-15
15. Consumer Protection
• Holder in due course rule
– Holders of consumer credit contracts who are holders
in due course are subject to all claims and defenses
that the buyer could use against the seller, including
personal defenses.
17-16
16. Real Defenses (universal defenses)
• Defenses that can be used against everyone,
including holders in due course
– Infancy
– Mental incompetence
– Illegality
– Duress
– Fraud as to the nature of the transaction
17-17
17. Real Defenses
• Infancy and Mental Incompetence
– The maker or drawer of the instrument was a minor
or mentally incompetent.
• Illegality
– The underlying contract for which the instrument was
issued was illegal.
17-19
18. Real Defenses
• Duress
– The instrument was drawn against the will of the
maker or drawer because of threats of force or bodily
harm.
• Bankruptcy
– An order for relief was issued by the federal court
that ended all the debtor’s outstanding contractual
obligations.
17-20
19. Real Defenses
• Unauthorized signature
– Someone wrongfully signed another’s name on an
instrument without authority to do so.
• Material alteration
– The amount of the instrument or the payee’s name
was changed wrongfully after it was originally drawn
by the maker or drawer.
17-21
20. Liability of the Parties
• No person is liable on an instrument unless that
person’s signature or the signature of an
authorized agent appears on the instrument.
• Parties’ liability depends on their function.
17-22
21. Makers, Acceptors, and Certain Drawers
The following are obligated to pay an instrument
without reservations of any kind:
• The maker of a note
• The issuer of a cashier’s check or other draft in
which the drawer and the drawee are the same
person
• The acceptor of a draft
17-23
22. Other Drawers and Indorsers
Obligated to pay an instrument only when three
conditions are met:
1. The instrument is properly presented to the
drawee or party obliged to pay the instrument,
and payment is demanded
2. The instrument is dishonored
3. Notice of the dishonor is given to the secondary
party
17-24
23. Other Drawers and Indorsers
• Presentment
– Demand made by a holder to pay or accept an
instrument
– May be made by any commercially reasonable means
• Dishonor
– Refusal to pay or accept a negotiable instrument
when proper presentment is made
17-25
24. Notice of Dishonor
• May be given by any reasonable means
• Sufficient if it reasonably identifies the instrument
and indicates that it has been dishonored
• Nonbank holders
– Must give notice within 30 days after the day of
dishonor
• Bank holders
– Must give notice before midnight of the day after
which it was notified of the dishonor
17-26
25. Question?
A holder in _________ is a holder who takes an
instrument for value and in good faith.
A. Good course
B. Due faith
C. Due course
D. Due coarse
17-27
26. Question?
___________ are defenses that can be used against
a holder but not a holder in due course of a
negotiable instrument.
A. Private defenses
B. Real defenses
C. Personal defenses
D. Special defenses
17-28
27. Question?
What defenses can be used against everyone,
including holders in due course?
A. Private defenses
B. Real defenses
C. Personal defenses
D. Special defenses
17-29
28. Question?
Which defense is used when the underlying
contract for which the instrument was issued
was illegal?
A. Mental Incompetence
B. Illegality
C. Duress
D. Bankruptcy
17-30
29. Question?
Which defense is used when the amount of the
instrument was changed wrongfully after it was
originally drawn?
A. Duress
B. Bankruptcy
C. Unauthorized signature
D. Material alteration
17-31
30. Question?
__________ means to refuse to pay a negotiable
instrument when it is due or to refuse to accept
it when asked to do so.
A. Dishonor
B. Presentment
C. Debase
D. Discredit
17-32
Editor's Notes
A basic principle of contract law is that people cannot transfer greater rights than they have themselves. This rule, however, does not apply to the law of negotiable instruments. People who are holders in due course of negotiable instruments can receive even more rights than those who held the instruments before them. Largely for this reason, negotiable instruments are used frequently and passed liberally from one person to another.
Teaching Tips Emphasize the importance of the holder in due course concept in the law of negotiable
instruments. Discuss with the class the various problems financial institutions would encounter if
there were no holder in due course rules.
Background Information
Courts of “equity,” or fairness, which developed in medieval England, coexisted with common law courts in the United States until the late 1800s. It was in the courts of equity that such maxims as, “He who seeks equity must do equity” and “He who seeks equity must have clean hands,” were developed as precedents.
A holder who receives an instrument from a holder in due course acquires the rights of the holder in due course, even though he or she does not qualify as a holder in due course. This stipulation is called a shelter provision. It is designed to permit holders in due course to transfer all of the rights they have in the paper to others. The shelter provision does not apply to a holder who has committed fraud or an illegal act.
The favorable treatment that holders in due course receive ensures that they take instruments free from all claims to them on the part of any person and free from all personal defenses of any party with whom they have not dealt.
Getting Students Involved
Discuss whether a holder in due course should have real defenses for failure of consideration and
breach of contract. Remind students that a holder in due course may have obtained
the negotiable instrument in question from another holder in due course and not from the maker
Negotiable instruments are often issued in exchange for property, services, or some other obligation as part of an underlying contract. Sometimes, the party to whom the instrument was issued breaches the contract by failing to perform or by performing in an unsatisfactory manner. If suit is brought on the instrument by a holder against the maker or drawer, the latter may use breach of contract as a defense. Because breach of contract is a personal defense however, it may not be used if the holder of the instrument is a holder in due course unless the parties dealt with each other.
Both lack of consideration and failure of consideration are personal defenses. They
may not be used against a holder in due course.
When someone is induced by a fraudulent statement to enter into a contract, that person may have the contract rescinded. However, he or she may not use that defense against a holder in due course. A holder in due course can cut through the defense of fraud in the inducement and collect from the person who was defrauded.
Getting Students Involved
Ask for a volunteer to contact the local/state Consumer Protection Agency to find out the kinds of protections available to consumers with respect to holders in due course.
Teaching Tips Have students recall the different elements of a contract, and remind them if one required element is missing, the contract is invalid. Then discuss how real defenses are similar, in that if one is present, it will void a negotiable instrument.
A minor (person under the age of 18 years) or mental incompetent need not honor a negotiable
instrument if it was given in payment for a contract that the minor or mental incompetent may
disaffirm on the grounds of minority or incompetency. This rule is true even if the instrument
comes into the hands of a holder in due course. Similarly, persons who have been found insane
by a court are not liable on a negotiable instrument, because their contracts are void.
Terms Legally, the term duress refers to any conduct that deprives a victim
of free will. All transactions entered into under such conditions are legally voidable
by the victim. Duress comes from the Latin word meaning hard.
Bankruptcy may be used as a defense to all negotiable instruments, even those in the hands
of a holder in due course. Holders of such instruments will receive treatment equal to that
of other similar creditors when the debtor’s assets are collected and divided according to
the bankruptcy law.
Usually, the alteration involves changing the payee’s name or increasing the amount of an instrument.
The alteration of an instrument may be used as a real defense.
Unless an instrument is written negligently so that it can be easily
altered, makers and drawers are not required to pay altered amounts.
They must pay only the amount for which the instrument was originally
written.
Terms Liable is related to the term ligature, which refers to something that is used to bind two things together.
Cross-Cultural Notes
In Mexico, a check must be presented for payment within 15 days of issuance. After 15 days, the drawer cannot be held liable. For checks that are made payable
in different towns, the time limit is extended to 30 days.
Other drawers and indorsers have limitations on their obligation to pay an instrument. They are said to be secondarily, or conditionally, liable. The drawer of a draft that has not been accepted is obligated to pay the draft to anyone who is entitled to enforce it; however, if a bank accepts a draft, the drawer is discharged. If a drawee other than a bank accepts a draft and it is later dishonored, the obligation of the drawer is the same as an indorser stated here.
Presentment may be made by any commercially reasonable means, including oral, written, or electronic communication. If requested by the person to whom presentment is made, the person making presentment must exhibit the instrument and provide identification.
Dishonor also occurs when presentment is excused and the instrument is past due and unpaid. The presenting party has recourse against indorsers or other secondary parties after notice of dishonor has been given.
The correct answer is “C” – due course. See next slide.
The correct answer is “C” – personal defenses. See next slide.
The correct answer is “B” – real defenses. See next slide.
The correct answer is “B” – illegality. See next slide.
The correct answer is “D” – Material alteration. See next slide.
The correct answer is “A” – dishonor. See next slide.