Law Commons^™

Reforming The Law: The Payment Rule As A Paradigm , Dale A. Whitman

Faculty Publications

The concept of negotiability of promissory notes is solidly entrenched in American commercial law. It derives from the English common law notion that a negotiable instrument is a reification of the obligation it describes; the instrument is regarded as a tangible form of the obligation. This notion has multiple ramifications, but three stand out. The first is the holder in due course doctrine which asserts that, when a negotiable instrument is transferred by the correct process (negotiation, which requires delivery of the paper) to someone with the right qualities (good faith, lack of notice, and payment of value), the maker …