The Legal Information Institute (LII) at Cornell University provides summaries of legal topics, including those related to the Uniform Commercial Code (UCC). Along with your textbook chapter, read the following article, which provides an overview of negotiable instruments, and then answer the following questions:
1. How does the UCC define a negotiable instrument? What are the two categories of negotiable instruments? Into which category do checks fall?
2. Which types of payment mechanisms or transactions are NOT considered to be negotiable instruments? Is money considered an instrument?
3. What is the “rule of derivative title” (look it up in a legal dictionary!)? Does this rule apply to negotiable instruments? Explain.