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Negotiable Law Essay

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Below is an essay on "Negotiable Law" from Anti Essays, your source for research papers, essays, and term paper examples.

Individual Assignment-Negotiable Instrument
Faison Alexander
BUL2131-Applied Business Law
November 10, 2012
Karen Inniss

Individual Assignment-Negotiable Instrument

You are interested in buying a new car and Bob lets you borrow one of the new cars on his lot for a week to test drive (Miller, 2011). You decide you like the car and when you visit Bob to drop off the car, he hands you the following document and a pen (Miller, 2011):
I promise to pay to the order of Bob's Auto Emporium $20,000 (Twenty thousand dollars) with interest at the rate of 7% per annum (Miller, 2011).
What type of instrument is this? Does this instrument meet the requirements for negotiability under the UCC (Miller, 2011)?
The instrument for this type of transaction is a promissory note, simply meaning that it is a written promise between the maker and the payee (Miller, 2011). The promissory note can be paid at a definite time or at demand (Miller, 2011). In order for it to be a negotiable instrument under the UCC it must meet the following requirements (Miller, 2011):
  1. It must be in writing
  2. It must be signed by the maker or the drawer
  3. It must be an unconditional promise or order to pay
  4. It must state a fixed amount of money
  5. It must be payable on demand or at a definite time
  6. It must be payable to order or to bearer, unless it is a check
After carefully reviewing the stated note it lacks two very important requirements to classify it as a negotiable instrument.   Although it did meet the standards for negotiability because it was in written form and had the necessary substance to deem it written, the instrument does not meet the requirements for negotiability under the UCC because it does not state a definite time payment is due or a demand for payment.



Reference
Miller, R. L., (2011).   Business law text & exercises. (6th ed.) South-Western, Cengage Learning.

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