Chapter 7 - Negotiable Instrumentss.pptx

negotiable instruments

1. CHAPTER 7 – DISCHARGE OF NEGOTIABLE INSTRUMENTS prepared BY: JAYSON M. AGONOY, CPA

2. Negotiable instrument ARE WRITTEN PROMISES TO PAY A SPECIFIC SUM OF MONEY TO A DESINATED PAYEE OR BEARER THEY SERVE AS WIDELY ACCEPTED FORM OF PAYMENT IN COMMERCIAL TRANSACTIONS COMMON TYPES OF NEGOTIABLE INSTRUMENTS INCLUDES CHECKS , PROMISSORY NOTES AND BILLS OF EXCHANGE .

3. KEY FEATURES OF NEGOTIABLE INSTRUMENTS NEGOTIABILITY UNCONDITIONAL PROMISE PAYABLE TO ORDER OR BEARER FIXED AMOUNT DATE AND PLACE OF PAYMENT

4. DISCHARGE OF NEGOTIABLE INSTRUMENT PAYMENT AND CANCELATION CANCELLATION BY THE HOLDER MATERIAL ALTERATION UNATHORIZED SIGNATURE STATUTE OF LIMITATIONS RELEASE AND WAIVER HOLDER’S DISCHARGE MERGER

5. PAYMENT AND CAncelation THE MOST COMMON METHOD OF DISCHARGE THE ISSUER PAYS THE INSTRUMENT’S FULL AMOUNT THE INSTRUMENT IS OFTEN CANCELED OR MARKED AS “PAID” AFTER PAYMENT

6. CANCELLATION BY THE HOLDER THE HOLDER CANCELLED THE INSTRUMENT BEFORE IT IS DELIVERED OR NEGOTIATED TO ANOTHER PARTY CANCELLATION SIGNIFIES THE HOLDER’S INTENT TO DISCHARGE THE INSTRUMENT

7. MATERIAL ALTERATION A MATERIAL ALTERATION TO A NEGOTIABLE INSTRUMENT CAN DISCHARGE IT MATERIAL ALTERATIONS INCLUDES CHANGES IN THE AMOUNT , DATE, OR PAYEES NAME , WHICH MAY INVALIDATE THE INSTRUMENT

8. UNAUTHORIZED SIGNATURE AN UNAUTHORIZED SIGNATURE CAN DISCHARGE THE INSTRUMENT IF THE PARTY LIABLE DID NOT AUTHORIZE OR RATIFY THE SIGNATURE THE INSTRUMENT BECOMES INEFFECTIVE IN THE HANDS OF AN UNAUTHORIZED SIGNER

9. STAUTE OF LIMITATIONS SETS A TIME LIMIT FOR ENFORCING NEGOTIABLE INSTRUMENTS AFTER THE PERIOD EXPIRES, THE INSTRUMENT IS CONSIDERED EXPIRED

10. RELEASE AND WAIVER A RELEASE IS A FORMAL DECLARATION THAT THE HOLDERNO LONGER EXPECTS PAYMENT A WAIVER IS THE VOLUNTARY SURRENDER OF ONE’S RIGHT UNDER THE INSTRUMENT, EFFECTIVELY DISCHARGING IT

11. HOLDER’S DISCHARGE THE HOLDER OF THE INSTRUMENT VOLUNTARILY RELEASES THE PARTY PRIMARILY LIABLE, DISCHARGING THE INSTRUMENT

12. MERGER WHEN A PARTY HOLDS BOTH THE ORIGINAL CONTRACT AND THE NEGOTIABLE INSTRUMENT, THE CONTRACT MAY MERGED WITH THE INSTRUMENT, EFFECTIVELY DISCHARGING IT.

13. CONCLUSION DISCHARGE OF NEGOTIABLE INSTRUMENTIS AN IMPORTANT CONCEPT IN COMMERCIAL TRANSACTIONS. UNDERSTANDING THE VARIOUS METHODS OF DISCHARGE IS CRUCIAL TO PARTIES INVOLVED IN HANDLING NEGOTIABLE INSTRUMENTS

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