Source: https://www.flashcardmachine.com/payment-system.html
Timestamp: 2020-08-13 00:44:04
Document Index: 60866975

Matched Legal Cases: ['§3', '§3', '§3', '§3', '§3', '§3', '§3', '§3', '§3', '§3', '§3', '§3', '§3', '§3', '§3', '§3', '§3', '§3', '§3', '§3', '§3', '§3', '§3', '§4']

Payment System Flashcards
Anomalous Indorsement §3-205(d)
When a non-holder signs the instrument. Shares the liability.
§3-206(c)
Taking an Instrument but dictating where the proceeds go. You restrict where the check is able to go. What ever bank first takes this type of check must follow the instructions.
Endorserds Liability
In an instrument is dishonored and endorser-insurer is obligated to pay the instrument (i) according to its terms at the time it was endorsed, or (ii) id incomplete when endorsed, according to its completed terms. The endorser's obligation is owed to a PETE or to a subsequent endorser who paid the instrument.
Someone who is legally entitled to make a demand that an instrument be paid.
i) the holder of the instrument
ii) a nonholder in possession of the instrument that has the rights of a holder
Holder 1-201 §(b)(21)(A)
—A “Holder” is the person in possession of a negotiable instrument that is payable either to ____bearer___, or to ___order________ that is the person __identification________.
What is necessary for negotiation? 3-201 (b)
Except for negotiation by a remitter, if an instrument is payable to an identified person negotiation requires transfer of possession and endorsement
 If the Instrument is made payable to bearer, it may be negotiated by transfer of possession alone.
How to become a holder
If an instrument is payable to the order of a named payee, only that person can become a holder once the person gets possession. If an instrument is payable to bearer, ANYONE can become a holder
Special Endorsement §3-205 (a)
When the endorsement identifies a person to whom the check is made payable.
Blank Endorsement §3-205(b)
When an instrument is endorsed and is not made a special endorsement. When an instrument is given a blank endorsement it is made bearer paper and is negotiable with mere possession.
Endorsement §3-204
A signature that is made on an instument for the purposes of restricting the payment of the instrument, incurring the endorsors liability or negotiating the instrument
A holder in due course §3-302
A holder of the instrument (1) the instrument when issued or negotiated to the holder does not bear such apparent evidence of forgery or is not otherwise so irregular or incomplete as to call into question its authenticity. (2) You must take the instrument for value, in good faith, without notice that the instrument is overdue, dishonored or uncured default, forgery/alteration, claims to the instrument (described in §3-306), defenses or claims in recoupment.
Negotiation §3-201
The transfer of possession whether voluntary or involuntary of a person other than the issuer to a person who thereby become the holder.
Transfer §3-203
Delivery by a person other than the issuer for the purpose of giving the person receiving delivery the right to enforce.
Effect of Transfor
"The Shelter Doctrine"
to vest in the transferee any right of the transfor
Note §3-104
A written promise to pay money
Draft §3-104
is a written order by one person, directing the latter to pay money to a third person
Good Faith §3-103(a)(4)
Honesty in fact and the observance of reasonable commercial standard of fair dealing
confess judgment clause
If you the maker don't pay the maker can go to court and confess judgment on your behalf
When you lend money and charge excessive interest rate- this is a possible defense
Jus Teri
Rights of the third party. The transfer of some peice of property that allows a thrid party to have rights to enforce
maker §3-103 (a)(5)
a person who makes the promise to pay
Drawer §3-103(a)(3)
the person who creates the draft and orders the drawee to pay
drawee 3-103(a)(2)
· every significant legal movement of the paper in between issuance and presentment
Trander of an instrument vests in the transferee any right of the transferor to enforce the insturment including any rights as a holder in due course
Value §3-303
§ It is issued/transferred for a promise of performance to the extent that the promise has been performance
§ The transfer acquires security interest/ lien in the interest (other than judicial lien)
§ The instrument is issued/transferred as payment or security for an antecedent claim against any person
§ The instrument is issued/transferred as payment or security or an antecedent claim against any person;
§ The instrument is issued/transferred in exchange for a negotiable instrument
§ The instrument is I/T in exchange for a negotiable instrument
§ The instrument is issued/transferred in exchange for an irrevocable obligation to a third party.
a slip of paper affixed to a negotiable instrument, as a bill of exchange, for the purpose of receiving additional endorsements for which there may not be sufficient space on the bill itself
Remitter §3-103 (11)
eans a person who purchases an instrument from its issuer if the instrument is payable to an identified person other than the purchaser.
Teller's Check §3-104(h)
means a draft drawn by a bank (i) on another bank, or (ii) payable at or through a bank.
Cashiers check §3-104(g)
means a draft with respect to which the drawer and drawee are the same bank or branches of the same bank
eans the first bank to take an item even though it is also thepayor bank, unless the item is presented for immediate payment over the counter
means a bank to which an item is transferred in course of collection except the depositary or payor bank;
Certificate of deposit §3-104(j)
an instrument containing an acknowledgment by a bank that a sum of money has been received by the bank and a promise by the bank to repay the sum of money. A certificate of deposit is a note of the bank
check §3-104(f)
(i) a draft, other than a documentary draft, payable on demand and drawn on a bank or (ii) a cashier's check or teller's check. An instrument may be a checkeven though it is described on its face by another term, such as "money order
a note that identifies a specific person to be paid. this is indicated by the language 'pay to the order of'
a note payable to anybody who possess the instrument
Negotiability §3-104
Presentment §3-501
means a demand made by or on behalf of a person entitled to enforce an instrument (i) to pay the instrument made to the drawee or a party obliged to pay the instrument or, in the case of a note or accepted draft payable at a bank, to the bank, or (ii) to accept a draft made to the drawee.
Drawee §3-103 (a)(2)
A person ordered in a draft to make a payment
Payor Bank §4-105 (3)
means a bank that is the drawee of a draft;
igns the instrument for the purpose of incurring liability on the instrument without being a direct beneficiary of the value given for the instrument, the instrument is signed by the accommodation party "for accommodation."
when you issue a note or draft for an underlying obligation you suspend the obligation till the note is either paid or dishonored.
an issued and unissued instruments and means a maker or drawer of an instrument.
drawee who has accepted the draft
means the drawee's signed agreement to pay a draft as presented
The substitution of one person in the place of another with reference to a lawful claim, demand, or right, so that he or she who is substituted succeeds to the rights of the other in relation to the debt or claim, and its rights, remedies, or Securities
The right of a defendant who has paid an entire debt, or common liability, to recoup a proportionate share of the payment from another defendant who is equally responsible for the payment of that debt or liability.
If an instrument is issued for value given for the benefit of a party to the instrument ("accommodated party") and another party to the instrument ("accommodation party") signs the instrument for the purpose of incurring liability on the instrument without being a direct beneficiary of the value given for the instrument, the instrument is signed by the accommodation party "for accommodation." There is an assumption that a person signing the instrument is an accommodating party.
ccommodated Party