Wa Bar Exam - Commercial Paper Questions And Answers, 100% Accurate. Graded A+| Latest Update 2024/25|

WA BAR EXAM - COMMERCIAL PAPER QUESTIONS AND ANSWERS, 100% ACCURATE. GRADED A+ Definition: Note - -Two-party commercial paper where MAKER promises to pay money to PAYEE or BEARER Definition: Draft - -Check. Three-party commercial paper where DRAWER orders the DRAWEE to pay a PAYEE Definition: Indorser - -Signer of check Definition: Order paper - -"Pay to the order of ___" "Pay to _____ or her order" Definition: Bearer paper - -"Pay to bearer" "Pay to cash" "Pay to the order of bearer" Four types of indorsements - -1) Special (signed & indicates transfer party) 2) Blank (paper contains only name of payee) 3) Qualified (without recourse) 4) Restrictive (for deposit only) Effect of forgery - -If an instrument contains a forged indorsement, it has not been properly negotiated and no party who takes it can become a holder or holder in due course because negotiation was improper Negotiability - general rule - -For an instrument tobe negotiable it must be in writing, signed by maker or drawer, containing an unconditional promise or order to pay a fixed amount of money, on demand or at a definite time, and contain no unauthorized promises or conditions. How is the instrument negotiated? - -Bearer paper: negotiation through delivery alone Order paper: Negotiation through proper indorsement + delivery Exceptions to unauthorized promises requirement (3) - -All arise in SECURED LOANS 1) Promise to protect collateral 2) Confession of judgment 3) Borrower's waiver of rights and defenses Holder in due course - general rule - -A holder in due course is a holder who takes the note in GOOD FAITH, for VALUE,