Negotiable Instruments. Chapter 26. Negotiable Instruments. Are formal written contracts used extensively in business transactions as a substitute for money and to extend credit. You should be able to: Recognize the various instruments
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An Agent may sign.
Signature can appear anywhere.
Order paper allows the maker or drawer to transfer to a specific person
Payable to order of Y
Pay to Y or order
Bearer Paper does not designate a specific payee; the maker or drawer agrees to pay anyone who presents the instrument for payment
Pay to order or bearer
Pay to Y or bearer
Pay any person presenting
Pay to order of cashTo Order or Bearer
Checks by definition are payable on demand
At a fixed date readily ascertainable, payable at a definite time
On lapse of a definite period after sight or acceptance
Subject to rights of
Extension at the option of the holder
Extension to a further definite time at option of maker or acceptor or automatically upon or after a specified event.Payable at a Definite Time or Upon Demand