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Promises to Pay and Orders to Pay

A second method of classifying commercial paper uses only two categories. All instruments involving the payment of money contain one of two elements - promises to pay money or orders to pay money. Instruments that contain promises to pay money can be broadly classified as notes and instruments that contain orders to pay money can be broadly classified as drafts. As it was indicated the certificate of deposit is a special type of note, and the check is a special type of draft.

Demand and Time Instruments

A third method of classifying commercial paper is based solely on the time at which the instrument is payable. Instruments that are payable whenever the holder chooses to presents them to the maker (in the case of a note) or to the drawee (in the case of a draft) are called demand instruments (or sights instruments). Those payable at a specific future data are time instruments. Notes, drafts and certificates of deposit can be either demand or time instruments, while checks - by definition - must be payable on demand.

Assignment

  1. Give the definition of: a) promissory note; b) check; c) draft;

d) certificate of deposit.

  1. Speak on: a second method of classifying commercial paper.

Unit 2 parties to commercial paper

Study these vocabulary notes:

parties to commercial paper

сторони комерційних документацій

maker

сторона яка видає вексель; векселедавець

payee

одержувач платежу

drawer

векселедавець

drawee

платник, той хто платить

be involved

бути залученим

acceptor

акцептант

accept

прийняти, акцептувати; акцепт

instrument

комерційний документ

indorser

індосант

transfer

передати

acquire

одержати

payment

сплата

specify

визначати

pay to the order

заплатити на вимогу

qualified indorsement

надпис з умовою

"without recourse"

"без обороту на мене"

indorse

робити передаточний надпис

debt

борг

indorsee

індосатор

bearer

пред’явник (документа)

bearer instrument

документ на пред’явника

stand point

точка зору

holder

володар, пред’явник чеку

holder in due course

володар векселя, як законний (за законом)

holder through a holder in due course

той, хто одержав чек від законного володаря

accommodation party

погоджувальна сторона

indorsement

передаточний надпис індосамент

guarantor

поручитель, гарант

blank indorsement

бланковий індосамент

common

звичайний

restriction

обмеження

spesial indorsement

спеціальний (іменний) індосамент

restrictive indorsement

індосамент з обмеженнями

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