Material Alteration. Williams purchased a used car from Stein for $\$ 1,000$. Williams paid for the car with a check (written in pencil) payable to Stein for $\$ 1,000$. Stein, through careful erasures and alterations, changed the amount on the check to read $\$ 10,000$ and negotiated the check to Boz. Boz took the check for value, in good faith, and without notice of the alteration. He thus met the Uniform Commercial Code's requirements for the status of a holder in due course. Can Williams successfully raise the universal (real) defense of material alteration to avoid payment on the check? Explain. (See Defenses and Limitations.)

Germanie Fequiere executed and delivered a promissory note in the principal amount of $240,000 to BNC Mortgage. As security for the note, Fequiere executed and delivered a mortgage on real property. BNC indorsed the promissory note in blank. Later, Chase Home Finance, LLC, became the holder in due course of the note and holder of the mortgage. When Fequiere failed to make payments on the note, Chase sought to foreclose on the property. Fequiere asserted that Chase could not foreclose on the property because the mortgage on the property had not been properly transferred from BNC to Chase. Assuming that is true, does it mean that Chase, as holder of the negotiable note, cannot foreclose on the collateral (the property secured by the mortgage)? Explain your answer. [Chase Home Finance, LLC v. Fequiere, 119 Conn.App. 570, 989 A.2d 606 (2010)]

Germanie Fequiere signed a note payable to BNC Mortgage. As security for the note, Fequiere signed a mortgage on certain real property. BNC indorsed the note in blank. Later, Chase Home Finance, LLC, became a holder in due course of the note and the holder of the mortgage. When Fequiere failed to make payments on the note, Chase sought to foreclose on the property. Fequiere argued that the mortgage had not been properly transferred to Chase. If that is true, can Chase obtain payment on the note? Why or why not?

James McCoolidge, a Nebraska resident, saw a used Honda Element for sale online. He contacted the seller, Daniel Oyvetsky, who offered to sell the vehicle for $7,500 on behalf of Car and Truck Center, LLC, a dealership in Nashville, Tennessee. McCoolidge paid the price and received the car and a certificate of title. Before he registered the certificate with the Nebraska Department of Motor Vehicles, he learned that the state of Tennessee had issued numerous certificates of title to the Element. Based on these documents, title could ultimately be traced to McCoolidge. But he chose to file a suit in a Nebraska state court against Oyvetsky, claiming that he had not received “clear” title. What does the UCC provide with respect to the passage of title under a sales contract? How does that rule impact McCoolidge’s claim? Discuss. [McCoolidge v. Oyvetsky, 292 Neb. 955, 874 N.W.2d 892 (2016)]

Holder in Due Course. Through negotiation, Emilio has received from dishonest payees two checks with the following histories:

(a) The drawer issued a check to the payee for $\$ 9$. The payee cleverly altered the numeral amount on the check from $\$ 9$ to $\$ 90$ and the written word from "nine" to "ninety."

(b) The drawer issued a check to the payee without filling in the amount. The drawer authorized the payee to fill in the amount for no more than $\$ 90$. The payee filled in the amount of $\$ 900$.

Discuss whether Emilio, by giving value to the payees, can qualify as a holder in due course of these checks. (See Holder in Due Course.)

Indorsements. A check drawn by Cullen for $\$ 500$ is made payable to the order of Jordan and issued to Jordan. Jordan owes his landlord $\$ 500$ in rent and transfers the check to his landlord with the following indorsement: "For rent paid, [signed] Jordan." Jordan's landlord has contracted to have Deborah do some landscaping on the property. When Deborah insists on immediate payment, the landlord transfers the check to Deborah without indorsement. Later, to pay for some palm trees purchased from Better-Garden Nursery, Deborah transfers the check with the following indorsement: "Pay to Better-Garden Nursery, without recourse, [signed] Deborah." Better-Garden Nursery sends the check to its bank indorsed "For deposit only, [signed] Better-Garden Nursery." (See Indorsements.)

(a) Classify each of these indorsements.

(b) Was the transfer from Jordan's landlord to Deborah, without indorsement, an assignment or a negotiation? Explain.

Abby Novel signed a handwritten note that read, "Glen Gallwitz $1-8-2002$ loaned me $5,000$ dollars at $6$ percent interest a total of $10,000.00$ dollars." The note did not state a time for repayment. Novel used the funds to manufacture and market a patented jewelry display design. More than seven years after Novel signed the note, Gallwitz filed a suit to recover the stated amount. Novel claimed that she did not have to pay because the note was not negotiable-it was incomplete. Is she correct? Explain.

Bearer Instruments. Adam's checks are imprinted with the words "Pay to the order of" followed by a blank. Adam fills in an amount on one of the checks and signs it, but he does not write anything in the blank following the phrase "Pay to the order of." Adam gives this check to Beth. On another check, Adam writes in the blank "Carl or bearer." Which, if either, of these checks is a bearer instrument, and why?

Promissory Notes. A college student, Austin Keynes, wished to purchase a new entertainment system from Friedman Electronics, Inc. Because Keynes did not have the cash to pay for the entertainment system, he offered to sign a note promising to pay $\$ 150$ per month for the next six months. Friedman Electronics, eager to sell the system to Keynes, agreed to accept the promissory note, which read, "I, Austin Keynes, promise to pay to Friedman Electronics or its order the sum of $\$ 150$ per month for the next six months." The note was signed by Austin Keynes. A week later, Friedman Electronics, which was badly in need of cash, signed the back of the note and sold it to the First National Bank of Halston. Give the specific designation of each of the three parties on this note.

Negotiability. Juan Sanchez writes the following note on the back of an envelope: "I, Juan Sanchez, promise to pay Kathy Martin or bearer $\$ 500$ on demand." Is this a negotiable instrument? Discuss fully.

Negotiable Instruments. Sabrina Runyan writes the following note on a sheet of paper: "I, the undersigned, do hereby acknowledge that I owe Leo Woo one thousand dollars, with interest, payable out of the proceeds of the sale of my horse, Lightning, next month. Payment is to be made on or before six months from date." Discuss specifically why this is not a negotiable instrument.

After submitting the high bid at a foreclosure sale, David Simard entered into a contract to purchase real property in Maryland for $192,000. Simard defaulted (failed to pay) on the contract. A state court ordered the property to be resold at Simard’s expense, as required by state law. e property was then resold for$163,000, but the second purchaser also defaulted. e court then ordered a second resale, resulting in a nal price of $130,000. Assuming that Simard is liable for consequential damages, what is the extent of his liability? Is he liable for losses and expenses related to the rst resale? If so, is he also liable for losses and expenses related to the second resale? Why or why not? [Burson v. Simard, 35 A.3d 1154 (Md. 2012)]

Consequential Damages. After submitting the high bid at a foreclosure sale, David Simard entered into a contract to purchase real property in Maryland for $\$ 192,000$. Simard defaulted (failed to pay) on the contract. A state court ordered the property to be resold at Simard's expense, as required by state law. The property was then resold for $\$ 163,000$, but the second purchaser also defaulted. The court then ordered a second resale, resulting in a final price of $\$ 130,000$. Assuming that Simard is liable for consequential damages, what is the extent of his liability? Is he liable for losses and expenses related to the first resale? If so, is he also liable for losses and expenses related to the second resale? Why or why not?

Before buying a house, Dean and Donna Testa hired Ground Systems, Inc. (GSI), to inspect the sewage and water disposal system. GSI reported a split system with a watertight septic tank, a wastewater tank, a distribution box, and a leach field. The Testas bought the house. Later, Dean saw that the system was not as GSI described-there was no distribution box or leach field, and there was only one tank, which was not watertight. The Testas arranged for the installation of a new system and sold the house. Assuming that GSI is liable for breach of contract, what is the measure of damages?