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 suffrage counter gives you the cash without requireing you to indorse the regard. After you leave, the teller slips the check into his pocket. Later, the teller delivers it (without an endorsement) to his friend carol 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 carrier wave in due course, Carol must have understand the instru¬ment (1) for value: (2) in good faith; and (3) without get that it is defec¬tive. An barb 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 holder can take an in¬strument for value in stipend of an antecedent claim. Here, the teller owed money to Carol on a gambling debt, so Carol has antecedent clai m (al¬though it may not have been a legal contract). The coarse deal of the transfer would probably call into question Carols good faith, however. Under the UCC, good faith is delimit as honesty in fact and the obser¬vance of intellectable commercial standards of everyday dealing.

Because of the good faith requirement, one must consider whether Carol, at the time she acquired the check, honestly believed that it was not defective. Here, the check was knead out to cash and the endorser was a bank teller. flush if Carol was not aware that the endorser worked in a bank, the issue of good faith can be develo pment on the grounds of suspicious circumsta! nces. Carol should have risk of infection that something was wrong with the check and that it was for this moderateness that the person did not hardly cash the check and give her the money. The circumstances also superpower constitute sufficient watch over 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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