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UCC Article 3 & 4

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There are three major issues to be addressed with article 3 negotiable instruments:

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There are three major issues to be addressed with article 3 negotiable instruments:

1. Is the instrument negotiable? If no, article 3 does not apply;
2. Is the holder a holder in due course - HIDC;
3. If there is a holder in due course, are there real defenses

Requirements for negotiability:

To be negotiable an instrument must be:
1. A signed writing;
2. An unconditional promise to pay;
3. Fixed amount of money;
4. Payable to bearer or to order;
5. At a specified time or on demand;
6. Does not contain any other conditions, undertakings, or agreements

A note is a written promise to pay. There are two parties in a note:
1. The maker; and
2. 2. The payee

A written order by the drawer -i.e. the person writing the check, to the drawee - i.e. the bank cashing the check, directing the drawee to pay money to the payee. There are three parties to a draft:
1. Drawer;
2. Drawee;
3. Payee

The person undertaking to pay money - e.g. promissory note