negotiation
DESCRIPTION
Negotiation. Negotiation. Negotiation. Payee transfers instrument (rather than just keeping it and getting money from obligor): Payment to creditor (goods, services, land, loan repayment, etc.) Gift to a donee Deposit in payee’s bank account. Requirements for Holder Status. - PowerPoint PPT PresentationTRANSCRIPT
![Page 1: Negotiation](https://reader035.vdocument.in/reader035/viewer/2022062410/56816622550346895dd979cc/html5/thumbnails/1.jpg)
Negotiation
![Page 2: Negotiation](https://reader035.vdocument.in/reader035/viewer/2022062410/56816622550346895dd979cc/html5/thumbnails/2.jpg)
Negotiation
![Page 3: Negotiation](https://reader035.vdocument.in/reader035/viewer/2022062410/56816622550346895dd979cc/html5/thumbnails/3.jpg)
Negotiation
Payee transfers instrument (rather than just keeping it and getting money from obligor):
Payment to creditor (goods, services, land, loan repayment, etc.)
Gift to a donee Deposit in payee’s bank account
![Page 4: Negotiation](https://reader035.vdocument.in/reader035/viewer/2022062410/56816622550346895dd979cc/html5/thumbnails/4.jpg)
Requirements for Holder Status1. Possession of the instrument
![Page 5: Negotiation](https://reader035.vdocument.in/reader035/viewer/2022062410/56816622550346895dd979cc/html5/thumbnails/5.jpg)
Requirements for Holder Status2. Good Title
Depends on words of negotiability found on the instrument.
![Page 6: Negotiation](https://reader035.vdocument.in/reader035/viewer/2022062410/56816622550346895dd979cc/html5/thumbnails/6.jpg)
Requirements for Holder Status2. Good Title
Bearer words = possession alone is good title
![Page 7: Negotiation](https://reader035.vdocument.in/reader035/viewer/2022062410/56816622550346895dd979cc/html5/thumbnails/7.jpg)
Requirements for Holder Status2. Good Title
Order words = properly indorsed
![Page 8: Negotiation](https://reader035.vdocument.in/reader035/viewer/2022062410/56816622550346895dd979cc/html5/thumbnails/8.jpg)
Indorsements
Generally
Signature by payee (or later holder) Normally on the back Can be on allonge Must transfer entire instrument
![Page 9: Negotiation](https://reader035.vdocument.in/reader035/viewer/2022062410/56816622550346895dd979cc/html5/thumbnails/9.jpg)
Blank Indorsement
Signature by payee only.
Creates bearer paper so later negotiations are by transfer of possession.
![Page 10: Negotiation](https://reader035.vdocument.in/reader035/viewer/2022062410/56816622550346895dd979cc/html5/thumbnails/10.jpg)
Special Indorsement
Signature by payee which names new person entitled to the money.
Creates order paper so later negotiations need indorsement of new person.
![Page 11: Negotiation](https://reader035.vdocument.in/reader035/viewer/2022062410/56816622550346895dd979cc/html5/thumbnails/11.jpg)
Restrictive Indorsement
Signature by payee indicating “for deposit” or “for collection” only.
If bank does not comply, bank is liable for conversion.
![Page 12: Negotiation](https://reader035.vdocument.in/reader035/viewer/2022062410/56816622550346895dd979cc/html5/thumbnails/12.jpg)
Intent of issuer determines payee identification“Pay to the order of George Bush.”
First U.S. President named George Bush?
Second U.S. President named George Bush?
Some other person with the name of George Bush?
![Page 13: Negotiation](https://reader035.vdocument.in/reader035/viewer/2022062410/56816622550346895dd979cc/html5/thumbnails/13.jpg)
Required indorsements
“Pay to the order of William Bell and Walter Bishop.”
Both must indorse to negotiate.
![Page 14: Negotiation](https://reader035.vdocument.in/reader035/viewer/2022062410/56816622550346895dd979cc/html5/thumbnails/14.jpg)
Required indorsements
“Pay to the order of William Bell or Walter Bishop.”
Only one must indorse to negotiate.
![Page 15: Negotiation](https://reader035.vdocument.in/reader035/viewer/2022062410/56816622550346895dd979cc/html5/thumbnails/15.jpg)
Required indorsements
“Pay to the order of William Bell and/or Walter Bishop.”
Only one must indorse to negotiate.
![Page 16: Negotiation](https://reader035.vdocument.in/reader035/viewer/2022062410/56816622550346895dd979cc/html5/thumbnails/16.jpg)
Missing indorsement
If transferred for value, transferee has specifically enforceable right to transferor’s indorsement.
![Page 17: Negotiation](https://reader035.vdocument.in/reader035/viewer/2022062410/56816622550346895dd979cc/html5/thumbnails/17.jpg)
Missing indorsement
If transferred for value, transferee has specifically enforceable right to transferor’s indorsement.
If check deposited in your account, bank becomes holder even without your indorsement.
![Page 18: Negotiation](https://reader035.vdocument.in/reader035/viewer/2022062410/56816622550346895dd979cc/html5/thumbnails/18.jpg)
Misspelled Payee’s Name“Pay to the order of Jerry W.
Beyer.”
Indorse in incorrect name (“Jerry W. Beyer”), or
Indorse in correct name (“Gerry W. Beyer”), but
Person giving value may require both indorsements.
![Page 19: Negotiation](https://reader035.vdocument.in/reader035/viewer/2022062410/56816622550346895dd979cc/html5/thumbnails/19.jpg)
Payee lacking capacity
A payee without legal capacity (e.g., minor or incompetent) may indorse.
![Page 20: Negotiation](https://reader035.vdocument.in/reader035/viewer/2022062410/56816622550346895dd979cc/html5/thumbnails/20.jpg)
Problems 94-101