Negotiable Instruments Make The Economy Go Around

Introduction to the Financial System Financial Instruments Financial instruments can be: • Equity This is usually through the selling of common shares and/or common stock. It gives the buyer some ownership of the firm and thus, voting power when it comes to electing the board of directors. Debt This is money that is borrowed from someone else. Debt must be repaid at set intervals. Debt can be divided into short and long-term debt. This should follow the matching principle where short-term assets should be funded with short-term debt.

But there is no phrase in the instrument which, like the articles of confederation, excludes incidental or implied powers; and which requires that everything granted shall be expressly and minutely described"and that "Although, among the enumerated powers of government, we do not find the word "bank" or "incorporation," we find the great powers, to lay and collect taxes; to borrow money; to regulate commerce . . . But it may with great reason be contended, that a government, entrusted with such ample powers . . . must also be entrusted with ample means for their execution. The power being given, it is the interest of the nation to facilitate its execution . . .."

One flaw of the Articles, the issue of no national currency was fixed by the Constitution. When we made a stronger national government, we, among other things, made sure that there would only be one system of currency, and so that no one would be to uneasy about the original fear of a very powerful central government, they created Checks and Balances. Document Six shows the system of Checks and Balances. Checks and Balances is a system that allows the three branches (Judicial, Legislative and Executive) to “check in” on each other to prevent one branch from gaining too much jurisdiction over the others. For example, “ The Executive Branch can call special sessions of Congress, and in turn the Congress can override a veto from the President.” The chart shows the Executive and Legislative (Congress) Branches checking in on each other. By being able to do so, they prevent the other from gaining too much influence over the others. In Document Seven, although being about something else, again shows some things about Checks and Balances, the system that prevents one branch from gaining too much authority over another. Again using the Legislative and Executive Branches as an example, “Congress can declare war, while the Executive Branch (President) is in Commander In Chief of the U.S. Army.” The system of Checks and Balances was beneficial for the bureaucracy to

Determine the elements of a valid contract, and discuss how consumers and banks each have a duty of good faith and fair dealing in the banking relationship.

Article 2 does not apply to contracts for the sale of real estate or stocks and bonds

Creation of Negotiable Instruments is simply the creation of commercial paper that can also be referred to as important money substitutes. Money simply does not work as well as negotiable instruments for the purposes of convenience, safety, record keeping, and extension of credit. There are critical elements in creating a negotiable instrument, one, it must be in writing form, it has to be signed by the maker or the drawer of it, there has to be an unconditional promise order to pay. Moreover, it must state a fixed amount of money, it does not require any undertaking in addition to payment of money, it must be payable at a definite time and lastly, it is payable

The check is money in an institution written on a paper instrument to be paid on demand to the payee. The promissory note is a two-party instrument and a person borrows money from another, in which there is a maker and payee (Negotiable Instruments & Banks, 2013).

Under the category orders to pay are the negotiable instruments drafts and checks. A draft is an order that is written and involves three parties (Miller & Hollowell,

Mutual assent and consideration go together so this paper will argue against them together. Mutual assent is the idea that all the parties in a contract know what they are contracting to and agree to it. As defined in Charles S. Knapp, Nathan M. Crystal, and Harry G. Prince’s Problems in

Certain business situations necessitate that customers take title to the goods purchased, agree to pay for them and yet not be in a position to accept delivery of the goods. In such cases, the sellers fulfill the manufacturing requirements and segregate the goods in their warehouses so as to make the goods available to the customers for shipment. Such transactions are labeled ‘bill and hold’ agreements (Grant Thornton, 2010).

other in order to form a contract, the value of the consideration need not be

This paper was prepared for GD530 Economics and the International System, taught by Professor Snow

Contracts are used in many different forms and for just as many different situations within our everyday lives. Some contracts are more involved than others and for some; contracts are an essential of their success. As we continue, we will take a look at different types of contracts with the main focus on enforceable contracts. With so many elements that are incorporated into any contract, the six essential elements of enforceable contracts will be the main focus of this writing. Having a clearer understanding of the essentials of life will help prepare us for life’s curves that may come our way.

Negotiable instruments are written orders or unconditional promises to pay a fixed sum of money on demand or at a certain time. Promissory notes, bills of exchange, checks, drafts, and certificates of deposit are all examples of negotiable instruments. Negotiable instruments may be transferred from one person to another, who is known as a holder in due course. Upon transfer, also called negotiation of the instrument, the holder in due course obtains full legal title to the instrument. Negotiable instruments may be

6.Certain some of money:- Sum payable must be certain or capable of being made certain. The sum shall be deemed to be certain when the rate of interest is specified. Money may be payable in installments is also a valid promissory note.