Types of Negotiable Instruments

Types of Negotiable Instruments

Drafts and checks are 3 party instruments: Drawer, Drawee and Payee.

§ Checks (cashier’s, teller’s and traveler’s) are drafts on a bank.

§ Trade acceptances seller is drawer and payee.

Case 24.1:  Flatiron Linen v. First American State Bank  (2001).

Promissory Notes are two party instruments:

§ Maker (Promisor) and

§ Bearer (Promisee).

Certificates of deposit (CDs): two party instruments. 

Case 24.2: U.S. v. Durbin (1999).