1. Does “when you can” mean that the instrument is payable on demand?

2. How does the requirement of looking at the debtor’s circumstances affect negotiability?

3. What language could have made the “when you can” clause not as critical for negotiability?

Gary Vaughn signed a document stating that Fred and Martha Smith were loaning him $9,900. As to when the loan was to be repaid, the document stated, “when you can.” Approximately 18 months later, the Smiths sued Vaughn for the entire amount, claiming default on the note as well as unjust enrichment. The Smiths moved for summary judgment. They contended that Vaughn was immediately liable for the entire amount but that they were willing to work out a repayment schedule. Vaughn also moved for summary judgment, arguing that he did not have to repay the Smiths because he did not have the ability to do so. The trial court denied the Smiths’ motion and granted Vaughn’s. The Smiths appealed.

JUDICIAL OPINION

SYLVIA SIEVE HENDON, Judge … The Smiths and Vaughn agree that the terms of the promissory note control in this case. They argue, however, over what law applies to determine the meaning of the phrase “when you can.” The Smiths contend that the note was payable on demand and that it was a negotiable instrument. It was neither. An instrument is payable on demand if it states that it is, or if no time is specified for repayment. Here, “when you can” was when payment was due. This was not the equivalent of completely failing to identify a repayment date. And this conditional term of repayment destroyed negotiability. This argument has no merit.

Vaughn, in turn, argues that he had to repay the Smiths only if they could demonstrate that he had the ability to pay. The Tenth Appellate District has determined that a reasonable amount of time “is not measured by hours, days, weeks, months, or years.” Instead, the trier of fact “should ascertain the parties’ original expectations and the circumstances surrounding the execution of the agreement.” In addition to these considerations, the Seventh Appellate District has stated that the trier of fact should examine all factors “ordinary and extraordinary.” We find these cases to be persuasive. And we add that an obligor’s ability to pay must also be a part of the court’s determination of reasonableness, since the ability to pay is part of “all the circumstances.”

Applying the law to the facts of this case, we uphold the court’s denial of the Smiths’ motion for summary judgment. The Smiths did not support their motion with evidentiary materials concerning the totality of the circumstances. But we are compelled as a matter of law to reverse the trial court’s judgment in favor of Vaughn. In support of his motion, Vaughn attached only his own affidavit stating that he had encountered some financial difficulties in the past, was presently employed, and had attempted to repay the Smiths a small fraction of what he owed. Considering the very broad test for “reasonableness,” we hold that Vaughn had failed to establish the absence of a genuine issue of fact concerning whether it was reasonable for him to repay the Smiths.

We reverse.