Chapter 3

Member of Group:
1. GreamaldyEdenardo S.
2. Raden Michael Bagas Pacu Permana
3. FlowrenciaStevanibr.Manalu
4. Asima Ria Valentine Aritonang
5. Maria Vianney Indri Ratna
6. Iwilham

1. What does the word “negotiable” simply mean?

Answer: Transferable in the ordinary course of business

2. What does the word “instrument” refer to?

Answer: Those pieces of paper such as cheecks or promissory notes that are used in these
business transactions.

3. Thus, what are “negotiable instrument”?

Answer: Checks, Promissory notes, and Bills of exchange that are used for our every day
business relations

4. What does our modern world of business need?

Answer: we need something that can substitute money, that is why there are Checks,
Promissory, drafts.

5. Are all negotiable instrument written contracts?

Answer: Most of them are in a form of written contracts such as Checks, promissory
Notes, and Drafts

6. Mention three types of negotiable instruments mostly used in business activities

Answer: Draft, Promissory Note, and Checks

7. Mention some legal names who are involved in a bank check?

Answer: Drawer and Payee

8. So, what is a check?

Answer: A letter used by the customer to make an order to withdraw money from the
bank.
9. Mention some some legal names ivolved in a promissory note!
Answer: Simple promissory note.
Demand promissory note.
Secured promissory note.
Unsecured promissory note

10. So, what is a promissory note?

Answer: a contract that contains a detailed promise from one party to pay a certain
amount of money to the other party

11. Mention some legal names involved in abill of exchange!

Answer: the drawee is the party that pays the sum, the payee receives that sum, and the
drawer is the one that obliges the drawee to pay the payee.

12. So, what is a bill of exchange?

Answer: A means of payment that contains an unconditional order signed by a money
order/drawer to another paying party (drawee) to pay a certain amount of money to that
party (payee).

13. Mention the necessary elements of a negotiable instruments!

Answer:
a. negotiable words
b. an unconditional promise
c. the amount payable must be a definite sum of money
d. time of payment must be specified either on demand or on a date which is sure to come
e. the instruments must be in witing and signed by the drawer or maker

14. What happens to negotiatable elements if these important elements are missing?
Answer: If the instrument contains a “conspicuous statement, however expressed, to the
effect that the promise or order is not negotiable,” its negotiability is destroyed, except
for checks, and “an instrument may be a check even though it is described on its face by
another term, such as 'money order.

15. What is a personal defense?

Answer: generally defenses applicable to the underlying agreement or between the
original parties to the underlying agreement. Any person who accepts note in the normal
course business is protected againts what the law.
16. mention the most common personal defense the law recognizes
1. Lack of consideration. (we discussed this topic in the chapter on contracts.)
 2. Fraud (this was the kind of defense Mr. Dixon tried to use when he insisted the corn
he got from Mr.Parker was inferior)
3. Duress. (we also discussed this topic under Contracts.) there is Another kind of
defenseAgainst which a holder in money for the reason that they might not be able to
collect it when It was presented to the drawer or maker for payment in order that the
business relations of our whole commercial world might be speeded up, it was necessary
to protect the holder in due course is not protected .

17. What is a real defense?

The real defense is duress.

18. mention the most common real defense the law recorgnizes
1. Forgery
2. Incompetency of the maker. (that is, that the maker was insane, a minor, etc.)
3. Illegslity. ( that the original transaction was not valid under the law.)
4. Material alteration. ( if Mr. Dixon could prove that the note he signed was for only $40
and that somebody had added another eipher and raised it to $400, he could use this
alteration. As a real defense and he would not have to pay the $400
19. What was the main purpose of The Uniform Negotiable Instruments Law?
The main purpose of the Uniform Negotiable Instruments Law is that business relations
from all over our commercial world can be accelerated, It is necessary to protect the holder
in time against this personal defense.
20. Mention things to remember about negotiable instruments!
1. Negotiable instruments is the legal name for check promissory notes, and Bills of
Exelhange that we use in the course of our business transactions.
2. All negotiable instruments are toritten contrnets.
3. The various persons who use negotiable instruments have specific legal names that
incdicate their responsibility in the transaction. a. The person who writes a check is called
the drawer The person to whom he gives the check, and to whom the check is payable, is
called the payee dan other
4. The necesSary elements of all negotiable instruments are these: A.Negotiable words.
 B. An unconditional promise.
C. The amount payable must be a definite sum of money,
D. Time of payment must be specified-either on demand or or a date which is Suro to come.
E. The instruments must be in writing and signed by the drawer or maker.
5. The most common personal defenses in a suit on a negotiable instrument are these:
a. Lack of consideration.
b. Fraud.
c. Duress.
6. The most common real defenses in a suit on a negotiable instrument are these:
a. Forgery.
b. Incompetence of the maker.
c: Illegality.
d. Material alteration.
7. The Negotiable Instruments Law of negotiable instruments in most states of the nation
and serves to protect the holders of these "pieces of paper" in their business transactions.

Parameter penilaian
No. Nama Ketepatan Encouragin Penguasaan Deskripsi
mahasiswa waktu g (bersedia materi penilaian
pengumpulan membantu
tugas teman)
1. Flowrencia 5 5 5 Ketepatan
stevani br pengumpulan
manalu tugas baik,
bersedia
membantu
teman
,penguasaan
materi baik
2. Greamaldy 5 5 5 Ketepatan
Edenardo s. pengumpulan
tugas baik,
 bersedia
membantu
teman
,penguasaan
materi baik
3. Raden Michael 5 5 5 Ketepatan
Bagas Pacu pengumpulan
Permana tugas baik,
bersedia
membantu
teman
,penguasaan
materi baik
4. Asima Ria 5 5 5 Ketepatan
Valentine pengumpulan
Aritonang tugas baik,
bersedia
membantu
teman
,penguasaan
materi baik
5. Maria Vianney 5 5 5 Ketepatan
Indri Ratna pengumpulan
Ernawati tugas baik,
bersedia
membantu
teman
,penguasaan
materi baik
6. Iwilham 2 2 3 Ketepatan
pengumpulan
tugas kurang ,
bersedia
membantu teman
kurang
,penguasaan
materi cukup