Floridah Portion Of Bar (Part A)lcommercial Paper & Secured Transactions Flashcard

FLORIDAH PORTION OF BAR (PART A)lcommercial paper & secured transactions Flashcards commercial paper: law ANSWERS: UCC article 3 is the creation of uniform rules for the payment of obligations in forms other than cash. These non-cash forms of payment, known as negotiable instruments or commercial paper, have unique characteristics that convey rights from one party to another while creating legally enforceable obligations. Article 3 applies to notes and drafts. Article 3 applies only to negotiable instruments 2 Q commercial paper: note ANSWERS: a note is a two-party instrument in which the maker promises to pay the payee a sum of money. The promissory instrument is generally evidence of an extension of credit; notes contain promises 3 Q commercial paper: certificate of deposit ANSWERS:a two-party instrument, particular to banks, in which the bank acknowledges an amount of money and promises to repay that amount. A CD is only an Article 3 instrument if it is negotiable, which most are not. 4 Q commercial paper: draft ANSWERS: a 3-party commercial paper in which the drawer orders a 2nd party (drawee or payor) to pay a sum of money to a 3rd party payee; contains orders: to national bank, pay to the order