Law on Negotiable Instruments.docx

ACT NO. 2031February 03, 1911 THE NEGOTIABLE INSTRUMENTS LAWI. FORM AND INTERPRETATIONSection 1. Form of negotiable instruments.An instrument to be negotiable must conform to t!e follo"ing re#uirements$%a& 't must be in "riting an( signe( by t!e ma)er or (ra"er* %b& +ust contain an uncon(itional ,romise or or(er to ,ay a sum certain in money* %c& +ust be ,ayable on (eman(, or at a -.e( or (eterminable future time* %(& +ust be ,ayable to or(er or to bearer* an( %e& /!ere t!e instrument is a((resse( to a (ra"ee, !e must be name( or ot!er"isein(icate( t!erein "it! reasonable certainty.Sec. 2. /!at constitutes certainty as to sum.T!e sum ,ayable is a sum certain "it!in t!e meaning of t!is Act, alt!oug! it is to be ,ai($%a& "it! interest* or %b& by state( installments* or %c& by state( installments, "it! a ,ro0ision t!at, u,on (efault in ,ayment of any installment or of interest, t!e "!ole s!all become (ue* or %(& "it! e.c!ange, "!et!er at a -.e( rate or at t!e current rate* or %e& "it! costs of collection or an attorney1s fee, in case ,ayment s!all not be ma(e at maturity.Sec. 3. /!en ,romise is uncon(itional.An un#uali-e( or(er or ,romise to ,ay is uncon(itional "it!in t!e meaning of t!is Act t!oug! cou,le( "it!$%a& An in(ication of a ,articular fun( out of "!ic! reimbursement is to be ma(e or a ,articular account to be (ebite( "it! t!e amount* or %b& A statement of t!e transaction "!ic! gi0es rise to t!e instrument.2ut an or(er or ,romise to ,ay out of a ,articular fun( is not uncon(itional. Sec. 3. 4eterminable future time* "!at constitutes.An instrument is ,ayable at a (eterminable future time, "it!in t!e meaning of t!is Act, "!ic! is e.,resse( to be ,ayable$%a& At a -.e( ,erio( after (ate or sig!t* or %b& On or before a -.e( or (eterminable future time s,eci-e( t!erein* or %c& On or at a -.e( ,erio( after t!e occurrence of a s,eci-e( e0ent "!ic! is certain to !a,,en, t!oug! t!e time of !a,,ening be uncertain.An instrument ,ayable u,on a contingency is not negotiable, an( t!e !a,,ening of t!e e0ent (oes not cure t!e (efect. Sec. 5. A((itional ,ro0isions not a6ecting negotiability.An instrument "!ic! contains an or(er or ,romise to (o any act in a((ition to t!e ,ayment of money is not negotiable. 2ut t!e negotiable c!aracter of an instrument ot!er"ise negotiable is not a6ecte( by a ,ro0ision "!ic!$%a& aut!ori7es t!e sale of collateral securities in case t!e instrument be not ,ai( at maturity* or %b& aut!ori7es a confession of 8u(gment if t!e instrument be not ,ai( at maturity* or %c& "ai0es t!e bene-t of any la" inten(e( for t!e a(0antage or ,rotection of t!e obligor* or %(& gi0es t!e !ol(er an election to re#uire somet!ing to be (one in lieu of ,ayment of money.2ut not!ing in t!is section s!all 0ali(ate any ,ro0ision or sti,ulation ot!er"ise illegal. Sec. 9. Omissions* seal* ,articular money.T!e 0ali(ity an( negotiable c!aracter of an instrument are not a6ecte( by t!e fact t!at$%a& it is not (ate(* or %b& (oes not s,ecify t!e 0alue gi0en, or t!at any 0alue !a( been gi0en t!erefor* or %c& (oes not s,ecify t!e ,lace "!ere it is (ra"n or t!e ,lace "!ere it is ,ayable* or %(& bears a seal* or %e& (esignates a ,articular )in( of current money in "!ic! ,ayment is to be ma(e.2ut not!ing in t!is section s!all alter or re,eal any statute re#uiring in certain casest!e nature of t!e consi(eration to be state( in t!e instrument. Sec. :. /!en ,ayable on (eman(.An instrument is ,ayable on (eman($%a& /!en it is so e.,resse( to be ,ayable on (eman(, or at sig!t, or on ,resentation* or %b& 'n "!ic! no time for ,ayment is e.,resse(./!ere an instrument is issue(, acce,te(, or in(orse( "!en o0er(ue, it is, as regar(s t!e ,erson so issuing, acce,ting, or in(orsing it, ,ayable on (eman(. Sec. ;. /!en ,ayable to or(er.T!e instrument is ,ayable to or(er "!ere it is (ra"n ,ayable to t!e or(er of a s,eci-e( ,erson or to !im or !is or(er. 't may be (ra"n ,ayable to t!e or(er of$%a& A ,ayee "!o is not ma)er, (ra"er, or (ra"ee* or %b& T!e (ra"er or ma)er* or %c& T!e (ra"ee* or %(& T"o or more ,ayees 8ointly* or %e& One or some of se0eral ,ayees* or %f&T!e !ol(er of an o