Promissory Notes 11 12 2013 Promissory Note Promise to pay loan Maker Borrower of the loan Payee Lender of the loan bearer Personal Check Negotiable instrument An unconditional promise or order to pay a specified amount of money on demand or at a definite time payable to order or to Drawer Person who issues the check Drawee The bank who is being ordered to pay the check Payee Person named on the face of the check to receive payment Indorser Peron who signs on the back of the check Indorsee Person to whom the check is endorsed Elements of Negotiability Must be a record Must be signed or authenticated by the maker or drawer Must be unconditional promise or order Must pay a specified amount of money Must be on demand or definite time Must be payable to order or to bearer Order Paper Negotiation of order paper requires appropriate signature and delivery Berar Paper Instrument that s payable to the holder of that instrument My be negotiated by delivery Example Endorsements o Check made out to cash o Check with a blank endorsement Black check with signature Life Special Contains the words Order Of Restrictive Contains the words Deposit Only Blank Simple signature Berar Paper Holder A person in physical position of an instrument Check which at that time is payable to him as payee as endorsee or to barer The holder of the check is entitled to collect the payment
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