Please read the case below and answer in the following format: 1) Relevant Law 2

Question

Please read the case below and answer in the following format: 1) Relevant Law 2) Conclusion - the outcome, and why.

The book for this course is Business Law with UCC application - 14th edition

8. David and Nettie Weiner signed seven promissory notes, totaling $89,000, in their capacity as president and secretary of NMD Realty Co. In addition, they indorsed each note on the re verse side with their individual signatures. Each note contained the following provision: “The Maker and indorser or indorsers each hereby waives presentment, demand, and notice of dis honor.” The Wei n ers claimed that, because they are secondarily liable, the bank may not pro ceed against them ind i vidually until after presentment, notice of dishonor, and protest have occurred. Do you agree with the Weiners ? Explain. Bank of Delaware v. NMD Realty Co., 325 A.2d 108 (DE)

Explanation / Answer

I ) Relevant law: Uniform Commercial Code: The code says that presentment, notice, or protest is fully excused when the party to be charged has waived it directly or by implication before or after the payment on the promissory note was due. In addition, since this is a Delaware case, The Delaware Negotiable Instruments Law (1 6 Del. C. Chapter-1) allows waiver of presentment, notice of dishonor, and waiver of protest.

2) Conclusion- The outcome: I do not agree with the Wieners. The rationale is that even though Weiner’s liability as an endorser occurs only when dishonor, notice of dishonor, and protest takes place if the under the UCC if a person has made a waiver cannot use the objection that there is no presentment, dishonor notice, or protest. The Delaware law also has a similar provision.

The outcome is that Weiner is fully liable for the endorsement because he has explicitly waived his rights. Normally, an endorser becomes liable for the promissory note only when there is dishonor, notice of dishonor, and protest. However, in this case, the defense has been waived by Weiner himself. The Uniform Commercial Code allows for waiving the need said need and now since Weiner has waived the need for dishonor, notice, and protest, he is liable.

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