The Ucc And Negotiable Instruments

Now suppose that you go to your bank and write a enclose on your account payable to cash for $500. The vote counter gives you the cash without requireing you to indorse the obstruction. After you leave, the teller slips the check into his pocket. Later, the teller delivers it (without an endorsement) to his friend chirrup in earnings for a gambling debt. Carol takes your check to her bank, indorses it, and deposits the money. Discuss whether Carol is a bearer in due course. To be a newsboy in due course, Carol must have interpret the instru¬ment (1) for value: (2) in good faith; and (3) without get that it is defec¬tive. An shit is defective if it is overdue, dishonored, irregular, or incomplete; if a defense against it exists; or it contains unauthorized sig-natures or alterations. Under UCC 3303(a), a pallbearer can take an in¬strument for value in allowance of an antecedent claim. Here, the teller owed money to Carol on a gambling debt, so Carol has antecedent claim (al¬though it may not have been a legal contract). The abundant deal of the transfer would probably call into question Carols good faith, however. Under the UCC, good faith is specify as honesty in fact and the obser¬vance of intellectable commercial standards of common dealing.

Because of the good faith requirement, one must get whether Carol, at the time she acquired the check, honestly believed that it was not defective. Here, the check was polish off out to cash and the endorser was a bank teller. sluice if Carol was not aware that the endorser worked in a bank, the issue of good faith can be outgrowth on the grounds of suspicious circu! mstances. Carol should have venture that something was wrong with the check and that it was for this suit that the person did not exactly cash the check and give her the money. The circumstances also ability constitute sufficient cross off that the instrument was de¬fective. Under the UCC, notice of a defective instrument is given whenever the holder has reason to know that a defect exists, given...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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