Commercial Paper: Presentment, Payment, & Dishonor Flashcards Preview

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Flashcards in Commercial Paper: Presentment, Payment, & Dishonor Deck (2)
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1

Negotiable Instruments:
Proper Steps

1. Holder presents to primary for payment (makers and drawers).
- Party paying can ask for proof
- Presentment is right of holder
2. Primary Parties
- Notes = payor/debtor
- CD's = bank that accepted CD deposit
- Checks = drawee bank (customer primarily liable not bank, bank is primary only if certified check)
- Drafts: drawee of the draft
3. Checks have time restrictions
- 30 days
- postdating checks has no effect on time for presentment
- bank can pay in good faith for 6 months
4. Time for other instruments
- Time draft = when time for payment arrives
- Note = as of due date
- Sight Draft = any time

2

Negotiable Instruments:
Dishonor

General: refusal to pay or accept (asking for ID okay)
- notice of dishonor is given to secondary parties
- must be within 30 days of dishonor

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