Negotiable Instruments Law – Definitions

NEGOTIABLE INSTRUMENTS LAW

Memory Aid

Based on the Outline of the 1994 Edition of Campos & Campos

DEFINITIONS

NEGOTIABLE INSTRUMENT

  • Written contract for the payment of money, by its form intended as substitute for money and intended to pass from hand to hand to give the holder in due course the right to hold the same and collect the sum due

 

PROMISSORY NOTE

  • unconditional promise in writing made by one person to another signed by the maker
  • engaging to pay on demand, or at a fixed or determinable future time a sum certain in money to order or to bearer
  • where a note is drawn to the maker’s own order, it is not complete until indorsed by him

 

BILL OF EXCHANGE

  • unconditional order in writing addressed by one person to another  signed by the person giving it
  • requiring the person to whom it’s addressed to pay on demand or at a fixed or determinable future time a sum certain in money to order or to bearer
  • check: bill of exchange drawn on a bank payable on demand. Kinds of checks:
  1. personal check
  2. manager’s/cashier’s check – drawn by a bank on itself. Issuance has the effect of acceptance
  3. memorandum check – “memo” is written across its face, signifying that drawer will pay holder absolutely without need of presentment
  4. crossed check –
  • effects:
  1. check may not be encashed but only deposited in bank
  2. may be negotiated only once, to one who has an acct. with a bank
  3. warning to holder that check has been issued for a definite purpose so that he must inquire if he received check pursuant to such purpose, otherwise not HDC
  • kinds:
  1. general (no word between lines, or “co” between lines)
  2. special (name of bank appearing between parallel lines)

 

BEARER

Person in possession of a bill/note payable to bearer

 

HOLDER

Payee or indorsee of a bill or note who is in possession of it, or the bearer thereof.

 

THE LIFE OF A NEGOTIABLE INSTRUMENT:

  1. issue
  2. negotiation
  3. presentment for acceptance in certain bills
  4. acceptance
  5. dishonor by on acceptance
  6. presentment for payment
  7. dishonor by nonpayment
  8. notice of dishonor
  9. protest in certain cases
  10. discharge

 

Reference:  University of the Philippines

BarOps ’99

Commercial Law – Val Feria, Mina Herrera, Gary Mallari & Rachel Ramos

 

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About Magz

First of all, I am not a lawyer. I'm a graduate of AB Political Science and went to the College of Law but stopped going to law school for some reasons. I'm a passionate teacher who has been teaching English to speakers of other languages and a person who likes writing and blogging. I lost some important files and software when my computer broke down so the reason I created this website is to preserve the notes, reviewers and digests I collected when I was at the law school and at the same time, I want to help out law students who do not have enough time to go and read books in the library.

Posted on December 19, 2011, in Negotiable Instruments Law and tagged . Bookmark the permalink. 3 Comments.

  1. I lovet your services & the mode of operetion.

  2. it’s really helpful.thanks much. keep it up!

  3. Thanks for this Ma’am. I’m taking a course on Negotiable Instruments Law this semester and I wonder if I can have your email account to ask for your materials in this course. 🙂

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