1. Issues zIs the instrument negotiable? zIs the transferee a holder? zIs the transferee a holder in due course? zWhat are the rights and liabilities of the parties to the instrument?

2. How to get the money... zPresentor has HDC rights and maker or drawer has a personal defense to payment zWarranties of transfer zSecondary(contractual)liability

3. Does the money have to be returned? zWarranties of presentment yAnyone who presents and OBTAINS payment warrants to the person who pays, that the presentor has xgood title xno material alterations xno knowledge of a forged signature of the maker or drawer.

4. Is the instrument negotiable? zA writing zsigned by its maker or drawer zcontaining an unconditional promise or order to pay za fixed amount in money zpayable upon demand or on a definite date and zmade payable to the order or bearer.

5. Is the transferee a holder? zOR has the instrument been properly negotiated zNegotiation of an yorder instrument vs. ybearer instrument

6. Form of the indorsement zIndorsed by the holder or someone authorized by the holder zIndorsed on the instrument zIndorsement may be conditional zIndorsement does not require words of negotiability

7. Types of indorsements zSpecial or zBlank zRestrictive or zNon-restrictive zQualified or zUnqualified

8. Is the transferee a holder in due course? zA holder zof a negotiable instrument zwho pays value zin good faith zwithout notice of a claim or defense effective against the enforcement of the instrument.

9. When does a HDC have better rights than an assignee? zPersonal defenses ybreach of contract or warranty yfraud in the inducement ydischarge by cancellation or payment yminority (voidable) yincompetence (voidable) yillegality (voidable) yduress (voidable) ymaterial alteration (original tenor)

10. When does a HDC have the same rights as an assignee? zReal defenses yForgery of maker’s or drawer’s signature yfraud in the execution ydischarge in bankruptcy yminority (void) yincompetence (void) yillegality (void) yduress (void) ymaterial alteration (extent of the alteration)

11. Warranties of transfer zA transferor for VALUE, with or without an indorsement, warrants that he/she has ygood title, yall signatures are genuine and authorized ythat no material alterations exist, ythat no defenses to the enforcement of the instrument exist, and yno knowledge of a bankruptcy proceeding against the maker, drawer, or drawee.

12. Warranties of presentment zAny person who presents and instrument and obtains payment warrants that he/she yhas good title yno material alterations exist, and yhas no knowledge that the drawer’s signature is unauthorized.

13. Secondary liability (unqualified indorsement) zPresentment for payment to the primary party yTime instrument yDemand instrument (note vs. check) zDishonor by the primary party zNotice of dishonor is given to the secondary party z

14. Does the money have to be returned? zWarranty of presentment yAny one who presents and OBTAINS payment warrants: xGood title xNo material alterations xNo knowledge of a forged signature of the maker or drawer.

15. Banking zPayor vs depositary bank zInsufficient funds check (overdrafts) zStale checks zStop payment orders zCustomer’s duty to examine bank statements zIncompetence or death of customer