FBLA: Business Law- Negotiable Instruments, Insurance, Secured Transactions, and Bankruptcy

Negotiable Instruments

A written unconditional promise or order to pay a certain amount of money at a definite time or on demand. A negotiable instrument is easily transferable from one person to another meaning it can be bought and sold. The most common type of negotiable instrument is an ordinary bank check. A promissory note is the same thing. It can be transferred by endorsement (signature), just like a check. If correctly prepared, it is considered the same as cash.

Primary Party

a person directly involved as a participant in an activity

Secondary party

Drawers of drafts and endorsers, persons who expect the primary party to pay but become liable if the primary party does not pay and certain conditions are met

Presentment for payment

A particular type of demand on the party who ought to pay the instrument - the maker of a note or the drawee of a draft. Two factors are important: (1) when must presentment be made, and (2) how must it be made?

Presentment for acceptance

In some cases an instrument must go through two presentments. The first is presentment for acceptance and the second is presentment for payment. Until the drawee has sight of the instrument, the time for payment is not certain.

Insurance

A contract whereby one party (insurer) agrees to indemnify or guarantee another party (insured) against a loss by a specified future contingency or peril in return for payment of a premium.

Secured Transaction

Any consensual transaction intended to create a security interest

Mortgages

long-term loans on real estates

Lien

right to possess and sell the property of a debtor

Debtors

These are customers who have bought products on credit and will pay cash at an agreed date in the future

Creditors

People or businesses to whom a business owes money; lend money

Bankruptcy Laws

Bankruptcy, the legal process by which an individual or business unable to meet financial obligations can seek court protection under these laws & can be relieved of the debts by court