Negotiable – Admission/Application Essay Example
Negotiable Instruments What type of instrument is this? A negotiable instrument is an unconditional order or a promise that describes payment to a party (Crawford, 2009). The amount of money to be paid is fixed and may or may not attract some interests. On the same note, other charges as provided for by the order or promise may be inclusive. The above described negotiable instrument is a promissory note.
Does this instrument meet the requirements for negotiability under the UCC?
Under the Uniform Commercial Code (UCC), negotiable instruments are characteristic of a number of requirements in order to stand valid (Crawford, 2009). These requirements include:
The order or the promise is payable at the issue time or when the holder actually possesses the subject matter.
The promise is payable on demand or at a well defined point in time.
Payment of money is the ultimate action in the promise and /or the order. Further instructions and actions are not regarded part of the promise or the order.
The promissory note identified as the negotiable instrument in the above description fails to meet the requirements of negotiable instruments under the Uniform Commercial Code. The promissory note fails to state what specific time it is payable. It neither states whether it is payable on demand nor at a well defined point in time. The payment period is an important aspect of this instrument, since it only considers payment of the money as the ultimate goal and action (Crawford, 2009). Failure to state when the payment is due violated the grounds upon which the promissory note is actualized, thus the failure to meet the requirements stipulated under the UCC.
Crawford, J. (2009). The Negotiable Instruments Law. New York: BiblioBazaar.