THE LAW ON NEGOTIABLE INSTRUMENTS
Definition of Terms
Form and Interpretation
Section 1. Form of Negotiable Instruments
Commercial Paper – a written promises or obligations that arise out of commercial transactions from the use of such instruments as promissory notes and bills of exchange.
Maker – the person issuing a promissory note
Drawer – person issuing bill of exchange
Money - medium of exchange authorized or adopted by a domestic or foreign government as part of its currency.
In literal sense, the term means “cash.” It also includes all legal tender.
Legal Tender – that currency which a debtor can legally compel a creditor to accept a payment ...view middle of the document...
Acceptor – a drawee who accepts the bill. He becomes primarily liable like the maker of a note, the drawer becoming only a surety.
Section 2. Certainty as to sum; what constitutes.
Stated Installments – the interest of each installment; the due date of each installment must be fixed in the instrument.
Exchange – the charge for the expense of providing funds at the place where the instrument is payable to meet the instrument which is issued at another place. It may be at a fixed rate of at a current rate.
R.A. No. 8183 – states that every monetary obligation must be paid in Philippine currency which is legal tender in the Philippines.
Section 3. When promise is unconditional.
Order – a command or imperative direction and, therefore, a mere request, supplication, or authority.
Section 4. Determinable future time.
After sight – after the instrument is seen by the drawee upon presentment for acceptance or accepted by the drawee.
Contingency – is, in law, an uncertain future event, or an event which may or may not happen.
Section 5. Additional provisions not affecting negotiability.
Confession of Judgment – it is a written acknowledgement by the defendant of his indebtedness or liability to the plaintiff. It enables the holder to obtain a judgment without the delay usually incident to a lawsuit, as it eliminates the necessity of a trial.
Section 6. Omissions; seal; particular money .
Sealed Instrument – under American law, is non-negotiable and is subject...