Sample Law Paper On Commercial Paper

Homework Question on Commercial Paper

• Answer the following questions in short-answer essay format.
• Each essay must be 5-7 complete sentences and is worth 8 points.
• Each essay must include an introduction, body, and conclusion. It must address all relevant parts of each activity.
• Please cite the course textbook, and if necessary, you may cite outside sources.
• Proper citation format for a reference includes the name of the author(s), the title of the work, the date of the publication, and the page number.
• Essay Questions:

1. Describe the rules and procedures for stopping payment on a check.
2. Identify the parties involved in various types of commercial paper.
3. Distinguish between the two basic kinds of commercial paper, promises to pay (notes) and orders to pay (checks and drafts).
4. List and explain the essentials for negotiability of commercial paper.
5. List and explain the non essentials for negotiability of commercial paper.

Homework Answer on Commercial Paper

1. Describe the rules and procedures for stopping payment on a check.

Stopping payment made through a check is doable before the recipient receive the cash. However, stopping a check may attract legal charges because of breach of contract. The issuer of check may hire a lawyer if the receiver demands the issuer to face a trial.  Several steps have to be made to stop payment:

• The account holder must contact the bank immediately either orally or through writing to stop check payment.
• The receiving bank may demand a written statement from the account holder, which should be provided immediately.
• The account holder should make notes in his/her accounts with regard to the stopped payment.
• The account holder may inform the recipient that he/she has stopped the payment, and suggest other means of payment.
• The bank would then request a fee to facilitate for transaction.

2. Identify the parties involved in various types of commercial paper.

There are several parties involved in carrying out transactions in different types of commercial papers. These parties are recognized through their names. According to Meiners, Ringleb, and Edwards, such parties include drawer, drawee, and payee (341). A drawer is the person who drafts the instrument that orders payment and is required to allow the bearer of the instrument to receive the money in due course. A drawee is the party, in this case, bank, which agrees to pay certain amount of money to the person bearing the commercial paper. A payee is the individual presenting the instrument to the bank to receive the money based on the drawer’s instructions.