I sat thru a three-hour lecture today on "commercial paper"

[Okla-homey]

That's "checks" and "notes" to the English speaking world. I must say, that was the single most difficult to endure presentation I have ever had the displeasure of being awake through. evar.

"Holder in Due Course"

mercy.


That is all.

[CORNholio]

That's "checks" and "notes" to the English speaking world. I must say, that was the single most difficult to endure presentation I have ever had the displeasure of being awake through. evar.

"Holder in Due Course"

mercy.


That is all.

Word to the wise.


http://www.psblog.net/images/WorldCup/randy_raymer_glasses.jpg

Get you some of those glasses and tell them you just got lasik surgery. Oh and try not to snore.

[Chuck Bao]

I wouldn't have lasted 3 hours. I think everything I need to know about commercial paper can be condensed into 10 minutes with a useful glossary of terms.

I have to go to a training course every 3 years to keep my analyst license. This time, they tell me that if I teach the course it still counts. It has to be a 3-hour course. Why does anyone think that 3 hours of a boring lecture would be better than a short 30-minute one with "listen up, folks, this is what you need to know"?

[Soonerus]

law 101...

[Frozen Sooner]

That's "checks" and "notes" to the English speaking world. I must say, that was the single most difficult to endure presentation I have ever had the displeasure of being awake through. evar.

"Holder in Due Course"

mercy.


That is all.

Welcome to my world.

Just say "UCC1" and "UCC3" a bunch and you should sail through.

Oh, and make sure you spell "endorsement" as "indorsement."

And remember that checks don't have makers. Contracts have makers. Checks aren't contracts.

And that the last indorser on a check is giving a guarantee that all indorsements are genuine.

And that the bank of first deposit is guaranteeing that the final indorsement is genuine or that the person named as final indorser has received credit for said check.

I'll see if I can't come up with any more painfully obvious stuff for you.

[King Crimson]

http://www.excaliburentertainments.co.uk/LOOKALIKES_2/Desk_Pose.JPG

[Mongo]

A check maybe considered a contract, it just depends on the state laws. If there is a dispute between two parties and one writes the other a check and in the memo line writes "Payment in Full" that could be a binding agreement.

Judge Judy tought me that ****

[Frozen Sooner]

A check maybe considered a contract, it just depends on the state laws. If there is a dispute between two parties and one writes the other a check and in the memo line writes "Payment in Full" that could be a binding agreement.

Judge Judy tought me that ****

A check can include contractual language on the back (known as a conditional endorsement.) A check, in and of itself, does not constitute a contract. It is a direction to the institution it is drawn on to pay on demand a set sum to a named entity.

[Mjcpr]

Heheheheh, he said tity.

[Mongo]

say gentleman A is a landlord. Genteman B is the renter. There was a dispute over how much closing out their business dealing would cost. If B wrote a check for 1200 smokes, and signed in the memo line "paid in full", and A accepted the check and cashed it.

now A is suing B for more money. B can be saved, depending on what state he lives in, due to his writing "paid in full" in the memo line. A agreed to the original terms buy accepting the check and cashing it.

[Mjcpr]

1200 smokes? That's like 60 packs, ergo, 6 cartons.

What if he doesn't smoke, then what? Can you make it out in samolians? I'm not sure of the exchange rate.

[Mongo]

1200 smokes? That's like 60 packs, ergo, 6 cartons.

What if he doesn't smoke, then what? Can you make it out in samolians? I'm not sure of the exchange rate.

the exchange rate of somolians is in your favor. They are competing with the Euro

[Mjcpr]

Euros have the tiny peeners, right?

[Mongo]

no, they have the "turtle neck" peeners.

[Frozen Sooner]

That's an interesting defense to liability. Call it the "Eric B. and Rakim" defense, I guess.

The point remains-while a contract may be written on a check, the check itself is not a contract.

[Frozen Sooner]

Thinkin of a master plan
Cuz ain't nuthin but sweat inside my hand
So I dig into my pocket, all my money is spent
So I dig deeper but still comin up with lint
So I start my mission- leave my residence
Thinkin how could I get some dead presidents

I need money, I used to be a stick-up kid
So I think of all the devious things I did
I used to roll up, this is a hold up, ain't nuthin funny
Stop smiling, be still, don't nuthin move but the money
But now I learned to earn cos I'm righteous
I feel great! so maybe I might just
Search for a 9 to 5, if I strive
Then maybe I'll stay alive
So I walk up the street whistlin this
Feelin out of place cos, man, do I miss
A pen and a paper, a stereo, a tape of
Me and Eric B, and a nice big plate of
Fish, which is my favorite dish
But without no money it's still a wish
Cos I don't like to dream about gettin paid
So I dig into the books of the rhymes that I made
To now test to see if I got pull
Hit the studio, cos I'm paid in full

[Mongo]

okay

[Mongo]

I am jealous of Pat's neatly trimmed, non-euro penis. his parents did him right

[Okla-homey]

say gentleman A is a landlord. Genteman B is the renter. There was a dispute over how much closing out their business dealing would cost. If B wrote a check for 1200 smokes, and signed in the memo line "paid in full", and A accepted the check and cashed it.

now A is suing B for more money. B can be saved, depending on what state he lives in, due to his writing "paid in full" in the memo line. A agreed to the original terms buy accepting the check and cashing it.

but like most general rules, there is an exception. This was actually covered in said boring-a$$ lecture. BTW, you are referring to the "full accord and satisfaction rule." If the payee gets a check so marked, even if some doofus in his company deposits it, he can (so long as he doesn't wait too long) say to himself "waitaflippinminute," return the funds to the person who gave him that check, and they start over from their original positions.

[47straight]

Quitcherbitchin, homey, and just do a *ton* of example problems on said topic.

[Chuck Bao]

Most of the commercial paper I deal with are tradable notes. There are so many different breeds of the animal that I tell the analysts that they have to read the fine print each time.

Wouldn't it be better to have an online source on the legal and accounting treatment as accepted guidelines instead of having to attend a 3-hour seminar?

Okay, maybe that's too easy.

[olevetonahill]

Just figure, Lifes a Bitch and Go on

[Okla-homey]

see below and tell me if you agree please.


Welcome to my world.

Just say "UCC1" and "UCC3" a bunch and you should sail through.

Oh, and make sure you spell "endorsement" as "indorsement."

And remember that checks don't have makers. Contracts have makers. Checks aren't contracts. Checks/drafts have drawers, drawees (banks) and payees. That said, checks do impute a contractual obligation based on the bank's terms on the signature card not do certain things like pay out over forged signatures or to refuse to pay checks/drafts drawn by the legit drawer.

And that the last indorser on a check is giving a guarantee that all indorsements are genuine. It is my understanding the indorser is secondarily liable if the drawer is insolvent or the drawee won't pay the draft, unless the instrument is indorsed using the magic words "without recourse" under the signature of the indorser

And that the bank of first deposit is guaranteeing that the final indorsement is genuine or that the person named as final indorser has received credit for said check. The guy taught us the presenter makes a warranty of title, thus if there are problems with the instrument, the bank could go after the Presenter. Thus, I'm told, banks often have little signs at each teller station stating "Know Your Presenter."

I'll see if I can't come up with any more painfully obvious stuff for you.

[SanJoaquinSooner]

I wouldn't have lasted 3 hours. I think everything I need to know about commercial paper can be condensed into 10 minutes with a useful glossary of terms.

I have to go to a training course every 3 years to keep my analyst license. This time, they tell me that if I teach the course it still counts. It has to be a 3-hour course. Why does anyone think that 3 hours of a boring lecture would be better than a short 30-minute one with "listen up, folks, this is what you need to know"?


OK, it has to be 3 hours. Does it have to be a 3 hour LECTURE? Why not shift gears during the time and have the participants do some small group problem solving or other tasks?

[Okla-homey]

OK, it has to be 3 hours. Does it have to be a 3 hour LECTURE? Why not shift gears during the time and have the participants do some small group problem solving or other tasks?

because invariably in those small group dealios, one or two do all the work and the rest of the folks coast. Thus, in order to ensure all feel the same amount of pain, lecturing is the way to go.;)

[Frozen Sooner]

[quote="Okla-Homey"]see below and tell me if you agree please.

Checks/drafts have drawers, drawees (banks) and payees. That said, checks do impute a contractual obligation based on the bank's terms on the signature card not do certain things like pay out over forged signatures or to refuse to pay checks/drafts drawn by the legit drawer.

I would agree with that, though as you point out the imputed contractual relationship is a de jure relationship governed by the signature card. The instrument is a direction under said contractual relationship to pay the entity named a certain amount on demand. Other contractual relationships based on the account agreement could be an agreement to not pay "stale-dated" or "post-dated" items-neither of which are forbidden under UCC-or an agreement that one signature on a check constitutes the signature of all account holders, etc.

It is my understanding the indorser is secondarily liable if the drawer is insolvent or the drawee won't pay the draft, unless the instrument is indorsed using the magic words "without recourse" under the signature of the indorser

That is correct and why a bank teller who accepts an item with a "without recourse" indorsement is going to get a talking to.

The guy taught us the presenter makes a warranty of title, thus if there are problems with the instrument, the bank could go after the Presenter. Thus, I'm told, banks often have little signs at each teller station stating "Know Your Presenter."

Yep, except the last part-I've never seen such a sign. Many times we'll accept an item with no indorsement presented by a person who is not the holder in due course for deposit into the holder in due course's account. Under the terms of the account agreement (and this is the case at ever bank I've worked at) we are allowed to stamp the check stating that it has been credited to the account of the holder in due course and we can indorse for him by contract. IOW we can act as attorney-in-fact for our account holder in this matter.

More goodies:

A check drawn on a bank's account that has been legitimately drawn must be paid on demand unless it has been altered or the indorsement forged. Thus, there is no such thing as an actual stop payment on a cashier's check, official check, or teller check. If an account holder warrants that a cashier's check has been lost, stolen, or destroyed, a bank may, at its discretion, credit the account holder for the amount of the check-however, the account holder can be held liable if the original item is ever presented for payment. The bank may, in some circumstances, demand that the account holder post a bond in case the original item shows up.

edit: I don't claim to be an expert on UCC by any means, but based on my experience and understanding of UCC that's how it works. If you want, a couple of years back I went to a two-day lecture series on the law of checks-I'll see if I can find my notes (which isn't likely, I may have thrown them out in an office move) and scan them in for you. There was a great diagram in there about transfer warranty, bank of first deposit, etc.

[Okla-homey]

A check drawn on a bank's account that has been legitimately drawn must be paid on demand unless it has been altered or the indorsement forged. Thus, there is no such thing as an actual stop payment on a cashier's check, official check, or teller check. If an account holder warrants that a cashier's check has been lost, stolen, or destroyed, a bank may, at its discretion, credit the account holder for the amount of the check-however, the account holder can be held liable if the original item is ever presented for payment. The bank may, in some circumstances, demand that the account holder post a bond in case the original item shows up.


I understand these "tellers" checks are not certified. Thus, the drawee is not liable for consequential damages and the drawer is not discharged. Distinguishable from the situation with a certified check, in which the drawer is off the hook and the bank's good name (credit) is on the line.

troo?

[Frozen Sooner]

No sir. A teller's check is drawn against the account of the bank, and if payment is denied the paying institution can be held liable for treble damages.

There is no difference between a teller's check and a cashier's check except that a teller's check is drawn by the bank on an account they hold at another institution while a cashier's check is drawn by the bank on an account the bank maintains at the bank's institution.

I've never worked at an institution that offers certified checks, but as I understand them a certified check is drawn on the account of a regular account holder with the institution guaranteeing that funds were available at the time the check was written and that the drawer's signature is genuine. While the bank will cordon off funds to pay that check, I believe that these funds are not immune to levy-so if someone hammers the account before payment, you may be out of luck. Not sure what the rules on stop-payment are on certified checks either.

[Okla-homey]

I've never worked at an institution that offers certified checks, but as I understand them a certified check is drawn on the account of a regular account holder with the institution guaranteeing that funds were available at the time the check was written and that the drawer's signature is genuine. While the bank will cordon off funds to pay that check, I believe that these funds are not immune to levy-so if someone hammers the account before payment, you may be out of luck. Not sure what the rules on stop-payment are on certified checks either.

I'm informed if a certified check is reported lost, stolen, destroyed, whatever, after 90 days, the drawee (bank) releases the funds to the claimant. If, however, that certified check is subsequently cashed by an HDC, the drawee can then seek reimbursement from the claimant and he must repay. Another good reason for knowing the presenter BTW.

I'm also informed the claimant need post no bond as he had to in an earlier day.

[Frozen Sooner]

90-day rule works for cashier's checks as well. No, the claimant does not have to post a bond. However, the paying institution can require one at their discretion. No real need to, though, as under UCC4-302(a) if payment is made to a bona fide claimant after 90 days from issuance of the item, the institution's liability is discharged.

Just looked it up-per UCC3-312 the same rules pertain to teller's, cashier's, and certified checks.

[Frozen Sooner]

Interesting. On rereading part of UCC3, I may change up something I've been doing. I've had some instances where the payee on an item made a restrictive indorsement to another party on a check, then crossed out the restrictive indorsement and attempted to present the item for encashment. I've turned these away, but it appears that under UCC3-207 "Reacquisition" that is something that can, indeed, be done. I'll need to run that one by item processing.

[Frozen Sooner]

I understand these "tellers" checks are not certified. Thus, the drawee is not liable for consequential damages and the drawer is not discharged. Distinguishable from the situation with a certified check, in which the drawer is off the hook and the bank's good name (credit) is on the line.

troo?


OK, more specific answer:

Under UCC3-411, wrongful stop payment of a teller's check results in the daring institution being liable for direct and consequential damages. I am under the impression that such damages can be trebled, but I find no language to such effect in the UCC. That may simply be a 9th Circuit interpretation.

Under UCC3-310(a), a teller's check provides the same discharge as a cashier's check or certified check.

[Okla-homey]

Interesting. On rereading part of UCC3, I may change up something I've been doing. I've had some instances where the payee on an item made a restrictive indorsement to another party on a check, then crossed out the restrictive indorsement and attempted to present the item for encashment. I've turned these away, but it appears that under UCC3-207 "Reacquisition" that is something that can, indeed, be done. I'll need to run that one by item processing.

It occurs to me that if there was no fraud or duress or other such shenanigans, and the payee is an HDC, he ought to be able to change his mind on the instrument.

[Frozen Sooner]

Yes, I'm actually spending a couple of hours on my day off reading the Uniform Commercial Code.

[Okla-homey]

Yes, I'm actually spending a couple of hours on my day off reading the Uniform Commercial Code.

me too.:O

[Frozen Sooner]

It occurs to me that if there was no fraud or duress or other such shenanigans, and the payee is an HDC, he ought to be able to change his mind on the instrument.

Well, "shenanigans" is the reason I was using. My train of thought was such:

Item is payable to Mike Rich.

Back of the item reads:

Pay to the order of Okla-Homey
(s)Mike Rich
Pay to the order of Dean
(s)Okla-Homey
Pay to the order of Holley
(s)Dean

I have physical possession of the item and cross out the restrictive indorsement language from all parties. It appears under the cited section that this is completely legal and OK as it was a reacquisition scenario. My train of thought was that I would not become the HDC again until Holley made a blank indorsement or a restrictive indorsement naming me.

[Okla-homey]

Well, "shenanigans" is the reason I was using. My train of thought was such:

Item is payable to Mike Rich.

Back of the item reads:

Pay to the order of Okla-Homey
(s)Mike Rich
Pay to the order of Dean
(s)Okla-Homey
Pay to the order of Holley
(s)Dean

I have physical possession of the item and cross out the restrictive indorsement language from all parties. It appears under the cited section that this is completely legal and OK as it was a reacquisition scenario. My train of thought was that I would not become the HDC again until Holley made a blank indorsement or a restrictive indorsement naming me.

Your interp. of the cited section seems completely consistent with everything else in that Article to moi. However, you're the banker. Thus, if your gut instinct is that scenario is a no-go, there may be some other reason you're only subconsciously aware of.

[NYC Poke]

Nail this stuff. The UCC stuff they ask on bar exams tends to be pretty straightforward, and if you know it, you know it. It's one of the few sections where you can walk out during break and know that you owned that section.

[Ike]

http://msnbcmedia3.msn.com/j/msnbc/Components/Slideshows/_production/_archive/Cartoons/ss_071130_holidayshopping/071204_theOffice_hmed3p.hmedium.jpg

Real business is done on paper. Write that down.

[Okla-homey]

Nail this stuff. The UCC stuff they ask on bar exams tends to be pretty straightforward, and if you know it, you know it. It's one of the few sections where you can walk out during break and know that you owned that section.

I will try. But here's the creepy part as I see it. As you know, its like a comprehensive final exam on everything you learned, or should have learned in law skoolz. And "commercial paper" is rarely tested. Therefore, with a finite amount of time to study and an almost infinite amount of crap you could be tested on, you gotta weigh how much time you spend in each area.

[AlbqSooner]

[QUOTE=Mike Rich;2306338]And remember that checks don't have makers. Contracts have makers. Checks aren't contracts.QUOTE]

A post-dated check is a contract. A post-dated check on an insufficient funds account, for this reason, cannot be prosecuted as a crime. No Court may impair the obligation of Contract.

[47straight]

Homey, again, stop with the mickey-mouse BS with the bankers. You aren't to learn what they know or think they may know. Learn the example problems. Do not clutter your head with anything else.

[Frozen Sooner]

Yeah, us bankers. We don't know anything about checks. :rolleyes:

[frankensooner]

You know, there hadn't been a Commerical Paper question on the bar for years and the year I took it, yep, there it was.

Homey, it is just issue spotting. You will do fine.