On the back of an envelope, Clark writes, "I promise to pay Dobie or bearer $700 on de¬mand. [Signed] Clark.". What type of instrument is this? Is it nego-tiable? If not, why not?
This instrument is a promissory note and a bearer note, and it is negotiable. A promissory note is an instrument with two parties: a maker and a payee. The maker of this note is Clark. The payee is "Dobieor bearer.".
A note that is payable to a specific payee "or bearer" is a bearer note.
To be negotia¬ble, an instrument must be in writing, be signed by the maker or drawer, be an unconditional promise or order to pay, state a fixed amount of money, bee payable on demand or at a defi¬nite time, and be payable to order or to bearer (unless it is a check).
This instrument meets all of these requirements. It is hand¬written on the back of an enve¬lope, which has permanence and is transferable. The maker signed it. Its payment is not conditional and includes the maker's definite promise to pay. Also, "$700" is a fixed amount payable in money, and the instrument is payable on demand and to "bearer.".
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