| what is negotiability? | where the seller is giving the transfer of title to one specific person who cannot transfer to anyone if they do not have consideration |
| what is transferability? | where the seller can transfer the title of the property without or with consideration |
| true or false: negotiability is an exception to the nemo dat rule | true |
| what are documentary intangibles? | these are physical property that carries intangible property rights or obligations |
| how is property fungible? | when it can be commercially interchangeable with property of the same kind. where A gives B £10, B does not need to give back the same note, just the same amount in coins or notes |
| what is a bill of exchange? | an unconditional order in writing, addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand or at a fixed or determinable future time a sum certain in money to or to the order of a specified person, or to bearer. an example is a cheque |
| who are payment transactions between? | the party responsible for making the payment 'debtor' and the party who the payment obligation is owed 'creditor' |
| what is a payment? | the discharge of the payment obligation |
| true or false: the payment must be notified to the one who is owed the payment | false, as long as they can see the amount in their account, this is enough for acceptance |
| true or false: the payer/payee must agree on the payment method | false, the parties may not always agree on a particular method at the time. so the payer/one that needs the payment must determine what method they want to use |
| true or false: valid tender is the same as legal tender | false, section 2 of the Coinage Act 1971 sets out the legal tender available. however parties are allowed to use tender that does not comply with this |
| what is a part exchange? | where the parties agree that the contracted money obligation will be satisfied by the payer offering money or documentary payment and goods |
| what is novation? | where one agreement is replaced by another agreement. this is very important in commercial transactions in banks |
| what is a set-off? | an arrangement whereby parties who owe each other money can aggregate the sums due to each other and set off those sums, leaving the balance due to be claimed either way. Broadly speaking, where two parties each owe each other a sum of money it makes commercial sense to simply allow them to strike a balance as to the amount owed |
| what are the characteristics of phsyical money? | it is a chattel
it is a thing in possession
it is fully negotiable
it cannot be bought
it is fungible
it is legal tender |
| what does Miller v Race establish? | that money, like goods, are transferred through delivery. doesnt matter if the note was stolen |
| when is payment effective in a funds transfer? | when the payee unconditionally accepts the money provided by the payer in their account |
| what does Tidal Energy Ltd v Bank of Scotland establish? | that if you type the wrong sort code or transfer the money to the wrong person by mistake, then you are not entitled to a refund of that money |
| what are the differences between e-money and physical money? | e-money is:
-not legal tender
-not negotiable
-e-money belongs to the bank, the person who has the account is not entitled to the title
-e-money can be exchanged for physical money |
| what does an instrument mean in commercial law? | an unconditional promise or order in writing to pay a fixed amount of money |
| how can an instrument be transferred? | by delivery alone or delivery and an endorsement by signing the back of the document |
| what are the features of bills of exchange? | unconditional order
signed by the person giving it
must be in writing
negotiable |
| what are the drawbacks of money and bills in commercial transactions? | in a question, establish the negotiability, then:
-very impractical for sales with large amounts of money
-not a long term service for commercial transactions
-fraud with cheques - steal someone else's cheque
-no identity required to claim
-Bills of Exchange Act does not protect against fraud |
| what are the advantages of bills of exchange? | -they are clear evidence that the payer is in debt to the payee. this can be very useful in terms of fraudulent payments
-there is certainty over the payments as the payer has to note the payee, the date, the bill is in writing and it has been signed. (Electric money transfers doesn’t let the person know the money has been transferred)
-they are negotiable and so title can be easily exchanged (even in case to settle the payer’s debt)
-physical money is more risky and impracticable for large commercial transactions
-title is transferred - can establish time - payer can gather money to pay the payee |
