LAW ON NEGOTIABLE INSTRUMENTS installment or interest, the whole shall

become due; or
(DISCUSSION)
d. With exchange, whether at a fixed rate
Functions or current rate; or
e. With cost of collection or an atty’s fee,
1. Substitute for money in case payment shall not be made at
2. Medium of exchange for most maturity
commercial transactions
3. Medium of credit transactions
Characteristics
1. Negotiability
2. Accumulation of Secondary Contracts
Forms
1. Promissory Note
2. Bill of Exchange 3rd ex: it is still sum certain because it is stated in the law
if the interest is not stated then use the legal interest rate.
Sec 1: Requirements
Last example: is not sum certain in money because the
a. Must be in writing signed by maker date for payment in the two installments is not stated.
(Yes, indicated kung kailan due ng kabuuan pero yung
(promissory) or drawer (BOE)
hulugan hindi)
b. Must contain unconditional promise
(note) or order (BOE) to pay a sum
certain in money
c. Must be payable on demand, fixed, or
determinable future time
d. Must be payable to order or to bearer
e. Instrument addressed to drawee, he
must name or otherwise indicated with
certainty. (BOE)

SEC 3: When promise is unconditional

An unqualified order or promise to
pay is unconditional within the meaning of this
Act though coupled with:
a. Indication of a particular fund out of
which reimbursement is to be made or
Drawee
a particular account to be debited with
the amount; or
Sec 2: What constitutes certainty as to sum
b. A statement of the transaction which
The sum payable is a sum certain gives rise to the instrument
within the meaning of this Act, although it is to
But an order or promise to pay out of
be paid:
particular fund is not unconditional
a. With interest; or
b. Installments; or
c. Installments, with a provision that,
upon default in payment of any

note: To be negotiable it must be an order. If it
is only request (right side) then it is non-
negotiable
last 3 examples: non-negotiable because what
if wala pala ka palang salary, dividends, or
money on hand
SEC 4: Determinable future time is payable
a. At fixed period after date or sight
b. On or before fixed or determinable
future time specified
c. On or at a fixed period after the
occurrence of a specified event which
is certain to happen, though the time
of happening be uncertain
An instrument payable upon a contingency
is not negotiable, and the happening of the
event does not cure the defect.
Sec. 5. Additional provisions not affecting
negotiability. - An instrument which contains
an order or promise to do any act in addition to
the payment of money is not negotiable.
But the negotiable character of an
instrument otherwise negotiable is not affected
by a provision which:
a. Authorizes the sale of collateral
securities in case the instrument be not
paid at maturity; or
b. Authorizes a confession of judgment if
the instrument be not paid at maturity;
or
c. Waives the benefit of any law intended
for the advantage or protection of the
obligor; or
d. Gives the holder an election to require
something to be done in lieu of
payment of money.
But nothing in this section shall validate
any provision or stipulation otherwise illegal.
SEC. 6. Omissions; seal; particular money. -
The validity and negotiable character of an
instrument are not affected by the fact that -
a. It is not dated; or
b. Does not specify the value given, or
that any value has been given therefor;
or
c. Does not specify the place where it is
drawn or the place where it is payable;
or
d. Bears a seal; or
e. Designates a particular kind of current
money in which payment is to be
made.
But nothing in this section shall alter or
repeal any statue requiring in certain cases the
nature of the consideration to be stated in the
instrument.