PMCKINSEY BUL2131 5001 WEEK4 INDW
You are interested in buying a new car and Bob lets you borrow one of the new cars on his lot for a week to test drive. You decide you like the car and when you visit Bob to drop off the car, he hands you the following document and a pen:
May 1, 201x
I promise to pay to the order of Bob 's Auto Emporium $20,000 (Twenty thousand dollars) with interest at the rate of 7% per annum.
What type of instrument is this? Does this instrument meet the requirements for negotiability under the UCC?
With the information provided it is safe to say this is a promissory note. A promissory note is a written instrument signed b y a maker unconditionally promising to pay a certain sum in money to a payee or a holder on demand or on a specified date. After reading the note you would assume that this would be one of the two types of promissory notes; an installment note or a collateral note. An installment note is a promissory note requiring payments over some period of time. Contrast with a single-pay loan, in which all principal and interest are due at maturity. A collateral note is Promissory note backed (secured) by the pledge of one or more specific assets. I would assume that is would be considered an installment note if this note were to meet the requirements of UCC’s rules of negotiability. In which this note does not meet the requirements of the UCC. The UCC’s requirements are not meant for several reasons in this document. Some of these reasons include; it fails to state how the note is to be paid; by a certain date and time or on demand. There is not a specify payer’s name or does it state who the bearer will be. Furthermore this note is not signed by you as the maker of the note. This means that this note has no endorsement. Plus, we didn’t arrange this agreement with Bob’s Auto Emporium before the test drive took place.
REFERENCES
Cengage Advantage Books: Business Law: Text and Exercises, 7th Edition
May 1, 201x
I promise to pay to the order of Bob 's Auto Emporium $20,000 (Twenty thousand dollars) with interest at the rate of 7% per annum.
What type of instrument is this? Does this instrument meet the requirements for negotiability under the UCC?
With the information provided it is safe to say this is a promissory note. A promissory note is a written instrument signed b y a maker unconditionally promising to pay a certain sum in money to a payee or a holder on demand or on a specified date. After reading the note you would assume that this would be one of the two types of promissory notes; an installment note or a collateral note. An installment note is a promissory note requiring payments over some period of time. Contrast with a single-pay loan, in which all principal and interest are due at maturity. A collateral note is Promissory note backed (secured) by the pledge of one or more specific assets. I would assume that is would be considered an installment note if this note were to meet the requirements of UCC’s rules of negotiability. In which this note does not meet the requirements of the UCC. The UCC’s requirements are not meant for several reasons in this document. Some of these reasons include; it fails to state how the note is to be paid; by a certain date and time or on demand. There is not a specify payer’s name or does it state who the bearer will be. Furthermore this note is not signed by you as the maker of the note. This means that this note has no endorsement. Plus, we didn’t arrange this agreement with Bob’s Auto Emporium before the test drive took place.
REFERENCES
Cengage Advantage Books: Business Law: Text and Exercises, 7th Edition
References: Cengage Advantage Books: Business Law: Text and Exercises, 7th Edition http://www.businessdictionary.com/definition/per-annum.html Business Law Today, Standard: Text & Summarized Cases Books.google.com/books?isbn=1133273564 ; Roger Miller - 2012 - Business & Economics