SEC 7.

When payable on demand

An instrument is payable on demand

(a)
Where it is expressed to be
payable on demand, or at sight, or
on presentation
(b)
In which no time for payment
is expressed
(c)
Where an instrument is
issued, accepted, or indorsed when
overdue, it is, as regards the
person so issuing, accepting, or
indorsing it, payable on demand
An instrument payable on demand:
is due and payable immediately after
deliver
is a present debt due at once
Time instrument instruments that are
NOT payable on demand; payable at a
definite time
Other terms for on demand:
1. at sight
2. on presentation
3. on call
4. at any time called for
on demand promissory notes
at sight bills of exchange
- Means that the instrument is
payable as soon as it is seen by the
party primarily liable
An overdue instrument is necessarily a
demand paper. The holder has an
immediate right of payment for the
money promised or ordered to pay.
When the instrument is issued, accepted,
or indorsed when the instrument is
already overdue, the instrument is
payable on demand.

SEC. 8. When payable to order

The instrument is payable to order
where it is drawn payable (1)to the order
of a specified person or (2)to him or his
order.
It may be drawn payable to the
order of:
(a) A payee who is NOT maker, drawer,
or drawee

(b)The drawer or maker

(c) The drawee
(d)Two or more payees jointly
(e) One or more of several payees
(f) The holder of an office for the time
being

Standardized words of negotiability:

a. to the order of
b. or order
c. or bearer
d. to bearer
- They convey most clearly the
consent that the instrument may
be transferred to whomever the
payee orders, allowing the further
negotiation of the instrument
An instrument payable to a specific
person is NOT an order instrument
and, therefore, is non-negotiable as the
promise or order is limited to paying one
person.

Effect where payee not named or

described in an order instrument
If no payee is named, there is nobody
who could give the order or authority to
collect. In other words, there would be
nobody who could indorse the instrument
and, therefore, there is no point
considering it negotiable.
An instrument payable to the order
is NOT NEGOTIABLE because the payee
is not named.
But it is sufficient if the payee though not
named is described with reasonable
certainty.

SEC 9. When instrument payable to

bearer
The instrument is payable to bearer(a) When it is expressed to be so
payable
(b)When it is payable to a person
named therein or bearer
(c) When it is payable to the order of a
fictitious or non-existing person,

and cuj fact was known to the

person making it so payable
(d)When the name of the payee does
not purport to be the name of any
person
(e) When the only or last indorsement
is an indorsement in blank
Bearer the person in possession of a
bill or note which is payable to bearer or
legally qualifies as a bearer instrument

When an instrument is payable to bearer,

payment to any person in possession
thereof in good faith and without notices
that his title is defective, at or after
maturity, discharges the instrument.
Delivery alone is enough to effect
negotiation of the instrument.
**An instrument payable to a person who
is already dead or does not exist is
payable to bearer. Since indorsement
is obviously impossible, the intention of
the drawer is to make the instrument a
bearer paper negotiable by delivery.