Was this check a negotiable instrument? Was it for a definite amount? This Discu
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Question
Was this check a negotiable instrument? Was it for a definite amount?
This Discussion will assess how well you understand the concept of negotiability. Begin by reading the facts of the case (Blasco v. Money Services Center) then decide: Was this check a negotiable instrument? Was it for a definite amount?
Christina Blasco borrowed money from Money Services Center for $500.00 and wrote a check for $587.00 which to be cashed not for two weeks. Before MSC could cash the check, Blasco filed for bankruptcy protection. It is illegal for creditors to collect debts after a bankruptcy filing, except that creditors are entitled to payment on negotiable instruments. The situation is that the check was a negotiable instruments, but it was not for a definite amount. The words prevail over numbers. Negotiable instruments are explained in article 3 of the Uniform Commercial Code in a form of notes or drafts. A note (promissory note) is a persons promise that they will pay the money back. A promissory note is used in virtually every loan transaction, just like the one Blasco did with Money Services Center. (Beatty, Samuelson, & Bredeson, 244) Furthermore, this check was not a negotiable instrument due to the fact that it was not a definite amount when the words were compared to the numbers. Chris Burchfield References Beatty, J. F., Samuelson, S. S., & Bredeson, D. A. (2013). Introduction to business law (4th ed.). Mason, OH: South-Western Cengage Learning. In the case Blasco v. Money Services Center, the main question is "Does five eighty-seven and 50/100 mean the same as $587.50." According to Beatty, Samuelson, and Bredeson, "words take precedence over numbers" (2013, p. 247). If the numbers and the spelling of the numbers don't agree, the numbers will be the winner. In order for the check to be negotiable the check must have a definite amount. I think that the amount in writing could mean something else, but it is clear that it means $587.50.
Explanation / Answer
Answer :
As per Uniform Commercial Code (UCC), when the terms in negotiable instrument contradict each other, Words take precedence over numbers.
Possible arguments by Blasco
For check to be negotiable, two rules will apply. The check must state a definite amount of money, which is clear within its four corners. If there is a contradiction between the words and numbers, Words take precedence over numbers. This means the check is for “ five eighty seven and 50/100 dollars”. This amount is not definite. A holder cannot be sure of precise amount of check. Therefore the check is not a negotiable instrument.
Possible argument by MSC
Blasco is right about the two rules but wrong at interpretation. If there is contradiction between words and numbers, words take precedence over numbers. In this case, there was no contradiction. The words were ambiguous but not contradicting to the numbers. If word were “ five thousand eighty seven “ then there would be contradiction. But here numbers clarified the words. Therefore it is negotiable.
My Opinion
UCC establishes simple and precise rules for creating negotiable instruments. But people do not always follow the rules of UCC letter by letter. It might be tempting for someone simply to invalidate defective documents but UCC favors negotiability. In my opinion, So this check is negotiable.
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