AAMPLE
Negotiable Instruments
Summer 2010
Syllabus
Instructor:
J. S Bhandari, Ph.D., LL.M. J.D. M.A., M.S.
Email:
jbhandari@fcsl.edu
Course times: Tuesdays & Thursdays, 1:00-3:00 p.m.
Required Resources
Problems and Materials on Payment Law, 8th Edition, Douglas J. Whaley (Wolters Kluwer 2008)
Selected Commercial Statutes For Payment Systems Courses, Advisory Panel Carol L.
Chomsky, Christina L. Kunz, Linda J. Rusch, and Elizabeth R. Schiltz (Thomson/West 2008)
Overview of Course
This course explores the law governing negotiable instruments -- that is, promissory notes,
checks, drafts, traveler’s checks. The course is taught from a set of problems contained in
Problems and Materials on Payment Law, 8th Edition, Douglas J. Whaley. The only other
required book is Selected Commercial Statutes.
This course discusses two types of negotiable orders: promissory notes and drafts. A
promissory note is a promise to repay a debt, typically issued to a creditor from whom a debtor
has borrowed money or purchased goods or property, and sometimes given as collateral. A
draft is a payment order, typically issued to pay an obligation. A check is a type of draft.
Though both are negotiable instruments, their different functions give rise to some different as
well as some common problems in the commercial world.
You may already have learned that in most circumstances, the buyer of something acquires
only the rights the seller had in the thing, and that if the seller had no rights (i.e., was a thief),
the buyer received no rights. Negotiable instruments law departs from that model, making it
possible for a buyer of a negotiable instrument to acquire substantially greater rights than the
seller held, and, therefore, to enforce payment even though the seller could not have enforced
the instrument. Not surprisingly, we will study when transferees acquire greater rights, and how
it is that one can sometimes acquire title to a negotiable instrument through a thief.
Many would-be borrowers and buyers cannot offer sufficient evidence of their ability to repay to
entice a lender or seller to extend credit. In such circumstances, a creditor typically demands
that someone else co-sign the note -- that is, also undertake to repay the obligation. We call
that person a surety, or, in the language of negotiable instrument law, an accommodation party.
Imagine an eighteen year old who wants to buy a car on credit, or a small corporate business
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borrowing operating capital. The car dealer wants greater repayment assurance than the
eighteen year old can offer, and demands that a parent co-sign the note. The bank knows
enough about corporation law to worry about the corporation filing for bankruptcy, and therefore
demands that principal stockholders personally guarantee the debt.
Many if not most suretyship agreements involve the signing of negotiable instruments. It is
therefore convenient to learn suretyship law within this course, and we will do that, focusing on
the special protections given to sureties who sign instruments, and how those protections can
be lost.
Checks commonly are used to pay for goods and services. We will explore the rights of the
various parties to a check, taking into account the many things that can go wrong, ranging from
the delivery of defective goods to the theft of a check from the payee to the theft of a checkbook
from the account holder. Here we enter a world of thieves, embezzlers, forgers, and innocent
folks whose business transactions go sour. We will explore the rights of the parties to checks in
these circumstances. Because the bad guys usually spend their ill-gotten gains before we can
catch them, we will learn how the uniform commercial code allocates losses in the event of
wrongdoing, discovering which of the innocent parties to a transaction will be, to coin a term, the
“stuckee.”
Course Objectives
This course has several primary objectives falling under three categories:
1.
Course content
Introduce students to key negotiable instrument theories and principles.
2.
Law school skills
Develop ability to successfully outline course content and take law school exams.
3.
Lawyering skills
Reinforce and expand ability to issue spot.
Sharpen critical reading, writing, and thinking skills.
Increase precision of language used while utilizing legal rules/principles.
Promote student’s ability to self-teach.
Course Expectations
The Online AAMPLE program requires active student participation. The completion of
assignments and participation in class discussion are not only critical for the success of the
students who participate, in online educational courses, the entire class discussion is often
dependent upon the completion of assignments by the designated student. In addition, the
quizzes designed for each course test each student's grasp of assigned materials, providing
critical evaluation of the student's level of understanding.
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There will be two Negotiable Instruments quizzes and practice essays administered during the
Online AAMPLE program. The scores that you receive on the quizzes and essays will not be
factored into the grade you receive for this course. You should use the quizzes to gauge your
understanding of the material tested.
I expect you to: 1) timely prepare each day’s problems, 2) timely post assignments as required,
3) actively participate in discussion boards linked to each set of assignments, 4) attend and
participate in the scheduled chat sessions and 5) take the quizzes.
It is therefore a requirement of the Online AAMPLE program that students take the course
quizzes and participate in assigned course activities. Penalties will be imposed upon students
who fail to meet this requirement. All deadlines given in the weekly assignment modules are
given in Eastern Daylight Time; they are only deadlines, and you should not wait until those
deadlines approach to complete or post the assigned work.
Any student who accumulates three penalty points for nonparticipation during the Online
AAMPLE program will be administratively dismissed from the program. Such students will be
denied access to the program from the point of dismissal, including a prohibition from taking the
final exam. Students will be assessed penalty points for nonparticipation under the following
circumstances:
(1) Any student who fails to take a quiz shall be deemed to have one non-participation
penalty point for each quiz not taken. No warnings are required to students who fail to
take quizzes.
(2) Any student who fails to satisfactorily participate in an assignment will be deemed to
have a non-participation penalty point. The professor who believes that a student has not
in good faith completed an assigned task shall inform the student that he/she has earned
this penalty. The determination of good faith completion of a task will be solely in the
discretion of the professor.
(3) Any student who is unprepared to discuss the assigned material during class shall be
deemed to have one non-participation penalty for that class.
(4) Any student who is absent, without adequate excuse, adequacy to be determined by
the professor, shall be deemed to have one non-participation penalty for that class.
Course Grade
Your grade in the class will be determined entirely by your performance on a three-hour written
closed book examination at the end of the course. That examination will present you with
problems somewhat like those you do each class, but without suggested code sections or a
copy of the code. Your task on the exam will be to apply the doctrine we study to solve those
problems, explaining fully how you reached your conclusion. You will not be required to know
UCC section numbers or to quote from memory the text of the UCC; rather, you will be
expected to recognize the issues posed by the given facts, paraphrase the applicable rules
provided by the UCC, and apply them, explaining their application. Your grade will not take into
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account your writing style, errors in punctuation, grammar, spelling or syntax, although
excessive errors in grammar or spelling will count negatively.
As you have already heard, we do not grade the exam on a curve, or allocate grades by any
formula; all of you can earn A’s, and all of you can earn D’s.
Honor Code
The Florida Coastal School of Law (“FCSL”) Honor Code is strictly enforced. A link to the Honor
Code may be found at http://www.fcsl.edu/node/277.
Revisions
This syllabus is subject to revision at the Professor’s discretion or to correct any error in its
content.
Weekly Assignments
May 13th:
Meet the professor; normal class time.
Week One: May 17 to May 21
Chapter 1:
Negotiability
Read:
Pages 1-25
Problems:
4-11
Chapter 2:
Negotiation
Read:
Pages 27-34
Problems:
12-14, 16-19
Chapter 3:
Holders in Due Course (Part I)
Read:
Pages 35-69
Problems:
20-29
PowerPoint: Briefing a case
Interpreting a statute
Contract formation
Holder in due course
Negotiability
Negotiation
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Week Two: May 24 to May 28
Chapter 3:
Holders in Due Course (Part II)
Read:
Pages 69-104
Problems:
30-36, 39-41
Quiz:
Quiz 1: Friday May 28th
Chapter 5:
The Nature of Liability (Part I)
Read:
Pages 111-118
Problems:
42-44
PowerPoint: IRACing
Understanding the banking system
Holder in due course
Liability on an instrument
Surety
Week 3:
May 31 to June 4
Chapter 4:
Nature of Liability (Part II)
Read:
Pages 118-132, 142-168
Problems:
45-53, 57-61, 63-68
PowerPoint: Outlining
Agency
Liability on an instrument
Week 4:
June 7 to June 11
Chapter 6:
Wrongdoing and Error (Part I)
Read:
Pages 259-292
Problems:
103-107, 110-116, 118-123
Quiz:
Quiz 2: Friday June 11th
PowerPoint: Legal analysis
Forgery
Warranties
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Week 5:
June 14 to June 18
Chapter 6:
Wrongdoing and Error (Part II)
Read:
Pages 292-323
Problems:
125, 126, 128-131, 134-139
Exam Preparation
Discuss:
Exam Review Questions and other topics for Final Exam which will be
administered on Wednesday June 23, 2009.
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