Negotiable Obligations for Discount: Notes, Acceptances, DPUs and BPOs

Banking & Finance Law Review (Osgoode Hall Law School), Forthcoming

Wayne State University Law School Research Paper No. 2013-20

Posted: 2 Aug 2013

See all articles by John Dolan

John Dolan

Wayne State University Law School

Date Written: 2013

Abstract

This article, which will be published fall 2013 in the Banking & Finance Law Review (Osgoode Hall Law School), assumes that the discounting of payment obligations generated under a letter of credit is a beneficial commercial practice and that the principle of negotiability enhances that benefit. The article contends, therefore, that commerce should extend the negotiability concept to a pair of new payment obligations which now appear in international trade. The article begins with a brief description of common law and statutory support for traditional negotiable instruments used in trade finance: notes and acceptances. The article then recounts the common law and statutory routes in some jurisdictions that bring the negotiability feature to the Deferred Payment Undertaking (DPU). Finally, the article suggests that by flexible use of the common law or by statutory revision, commercial law could and should extend negotiability to the Bank Payment Obligation (BPO).

Suggested Citation

Dolan, John, Negotiable Obligations for Discount: Notes, Acceptances, DPUs and BPOs (2013). Banking & Finance Law Review (Osgoode Hall Law School), Forthcoming, Wayne State University Law School Research Paper No. 2013-20, Available at SSRN: https://ssrn.com/abstract=2304884

John Dolan (Contact Author)

Wayne State University Law School ( email )

471 W. Palmer
Detroit, MI 48202
United States
313-577-4856 (Phone)

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