NEGBANK Promissory note: maker---payee; written promise to pay a sum of money Bill of exchange: drawerdraweepayee; order made by a person

to another to pay money to a third person

Section 1. forms of negotiable instrument. An instrument to be negotiable must conform to the following requirements: a. it must be in writing and signed by the maker or drawer -it can be written anywhere because it can be transferred either through constructive (symbolic) delivery or actual delivery - It cannot be ORAL -any mark is sufficient as a substitute for the signature of the maker or drawer as long as the intention of the person is to be bound by the contract b. must contain an unconditional promise or order to pay a sum certain in money not coupled a condition (if) *must be certain and not subject to contingency even though it has happened, it is still non negotiable must be in a sum certain in money because money is used as the standard of exchange *an indication of a particular fund out of which reimbursement is to be made or a particular account to be debited with amount *a statement of the transaction which gives rise to the instrument an order or promise to pay out of a particular fund is not unconditional because it is highly dependent on whether the account has money or not certainty as to sum: with interest, stated installments, stated installs with a provision that if not paid the whole amount will be due, with exchange (fixed or current rate), with costs of collection or an attorneys fee in case payment shall not be made at maturity *holder should be able to determine from the instrument the amount he is entitled to receive at maturity *if the instrument calls for an act other than the payment of money, it is non negotiable (must be substitute for money) *promissory note giving the maker the right to ascertain the amount payable is non negotiable *stated installments must contain: the interest of each installment and the date of each installment must be fixed in the instrument ( a promise to pay in installments without a date does not fulfill the requirements of the law)

-if a note provides for acceleration at the option of the holder, the insrument is non negotiable

-a provision for payment of a sum in a foreign currency does not impair negotiability

c. must be payable on demand or at a fixed or determinable future time determinable future time: fixed period after date or sight, on or before a fixed determinable future time specified therein, on or at a fixed period after the occurrence of a specified event which is certain to happen, though the time of happening be uncertain - *an instrument payable upon a contingency is not negotiable, and the happening of the event does not cure the defect - in case of demand/sight instrument: the holder may call for payment at anytime; term/time instrument: payable upon arrival of the time for payment - *after sight- after the instrument is seen by the drawee upon presentment of acceptance - a bill or note payable several days before the occurrence of a the specified event is not negotiable since the date of maturity of the instrument can only be ascertained after it has become overdue (the time of payment therefore is uncertain) - must be payable on demand: when it is expressed to be payable on demand or at sight, or on presentation; in which no time for payment is expressed (when it is overdue, it is regarded as to ne payable on demand) d. must be payable to order or bearer -it maybe drawn payable to the order of: anyone(not maker, drawer or drawee), drawer or maker, drawee, two or more payees jointly (and), one or more several payees (or), the holder of an office for the time being - order or _________; the order of ________ -payable to bearer when: It is expressed to be so payable, it is payable to a person named therein or bearer, it is payable to the ORDER of a fictitious/non existing person (and such fact was known to the person making it so payable), when the name of the payee does not purport to be the name of any person, when the only/last indorsement is an indorsement in blank e. where the instrument is addressed to a drawee, he must be named or otherwise indicated therein with reasonable certainty -