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12 terms

Chapter 13

Negotiable Instruments
STUDY
PLAY
commercial paper
instruments that contain a promise to pay money. (ie - checks)
negotiable instruments
a commercial paper that is fully transferable
notes
a written promise to pay a specific amount of money
drafts
an instrument used to show someone is requiring someone else to pay money. a check is the most common.
maker
the issuer of a promissory note
payee
the person receiving the money
drawer
the person who issues the draft
drawee
the person who pays the draft (ie - the bank)
issuer
the maker of the promissory note
holder in due course
someone who has given value for an instrument in good faith
negotiation
transfer of an instrument by someone other than the issuer. to be negotiated, order paper must be indorsed and then delivered to the transferee.
indorsement
the signature of the payee