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Flashcards in week 6 Deck (43)
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1

a person in possession of a negotiable instrument

bearer

2

negotiable instrument payable to bear or cash
-payable to possessor or inanimate objects

bearer paper

3

having no words other than the signature of the endorse

blank endorsement

4

a check drawn on a banks own funds and and signed by a responsible bank official

cashiers check

5

a check for which the bank assumes that the drawer has sufficient funds to make payment

certified check

6

the acknowledgment by a bank of a receipt of money with an agreement of repayment

certificate of deposit

7

an order by a deposited on the bank to pay a sum of money to a payee

check

8

a written order by one person directing another to pay a sum of money to a third person

draft

9

the person, company, or financial institution ordered to pay a draft

drawee

10

one in possession of a negotiable instrument

holder

11

named holder of endorsed negotiable instrument

indorsee

12

the signature of holder on the back of a negotiable instrument with any directions or limitations

endorsement

13

a person who signs his/her name on the back of an instrument

indorser

14

the transfer of a negotiable instrument from the creator of a negotiable to a payee/holder
-creator delivering instrument to payee

issue

15

the party who executes a promissory note

maker

16

a writing drawn in a special form which can be transferred as a substitute for money or as an instrument of credit

negotiable instrument

17

the act of transferring ownership of a negotiable instrument to another party

negotiation

18

negotiable instrument made payable to the order of a named party; the word order or its equivalent must be used
-payable to named person

order paper

19

the party to whom any negotiable instrument is made payable

payee

20

a negotiable instrument containing a promise to pay

promissory note

21

an endorsement which limits the liability of the indorser

qualified indorsement

22

an endorsement that restricts the use of a negotiable instrument

restrictive endorsement

23

an endorsement which designates the particular person to whom payment is to be made

special endorsement

24

-negotiable instrument and commercial paper mean same thing
-writing in special form
-can be transferred as substitute for money
-act as a credit device

commercial paper

25

-promissory note
-certificate of deposit
-check
-draft

classification of negotiable instruments

26

promises to pay (2)
-promise by one party to
-pay another party
-two party paper

1. promissory notes
2. certificates of deposit

27

parties to two party paper

-notes and certificates of deposit
-maker; promising to make the payment
-payee; to whom payment is going to be made

28

made by financial institution
-banks and savings and loans

certificate of deposit

29

-drafts and checks
-order by one party directed to
--another party to
-pay a third party
-three party paper

classifications of orders to pay

30

-drafts and checks
-drawer
-drawee
-payee

parties to three party paper