Identifying the Facts and Issues

The Uniform commercial Code (UCC) has the following requirements for instrument to be negotiable: the instrument must be in writing, the instrument must be payable to order of or to the bearer, the instrument must include an unconditional promise, the instrument must state a fixed amount of money, the instrument must be payable on demand, and

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.

Assessment question

A transfer of an order instrument requires the

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of the payee. An indorsement is a

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, which is typically placed

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.

Assessment question

Generally, the purpose of an indorsement on an instrument is to

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. The checks deposited by Jacob

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indorsed by MPTC. Therefore, Peoples Bank

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accepted the checks for deposit.

Assessment question

What If the Facts Were Different?

Assume that Jacob convinced the potential customers to write checks out to him personally, rather than MPTC. Jacob then signed the checks and deposited them with Peoples Bank. Peoples Bank had no notice of the fraud.

In this case,

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is the drawer, and

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is the payee.

Assessment question

MPTC's name

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appear on the check. The checks

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negotiable. Therefore, Peoples Bank

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accepted the checks for deposit.