Question

Mr. and Mrs. Santana decided to get a pool in their backyard. They financed the purchase by issuing a promissory note to Pool Installation Company. The Pool Installation Company sold the promissory note to a bank. A month after the promissory note matured, the pool started falling apart - the pool pump wouldn't turn on, there was a long crack down the side of the pool, etc. Mr. and Mrs. Santana refused to pay on their promissory note and brought action against the Pool Installation Company for breach of contract. Explain if the bank is a holder, a holder in due course, or a holder through a holder in due course? Does the breach of contract claim impact the bank's ability to collect on the promissory note? *For all the discussion forums you must be citing to your textbook. You must have a pinpoint citation for full credit. Keep in mind that failing to cite sources (your textbook or

Answer 1

Bank point of view “ Holder and Holder in Due Course :

Holder is a person who is entitled for the possession of a negotiable instrument in his own name . Hence Bank shall receive or recover the amount due thereon.

Where as Holder in due course – In legal term for an Original or any subsequent holder of a negotiable Instrument who has accepted in good faith and has exchanged something valuable for it.

Holder in due course means a person who must have the possession of the Instrument . Holder may or may not be with possession Of Instrument .

Case analysis – Mr and Mrs Santana decided to get a pool in their backyard .

They financed the purchase by issuing a Promissory Note to Pool Installation company. The Pool installation sold the promissory note to a bank.

After a month , promissory note matured but pool started falling and the pool pump would not turn on plus long crack down the side of the pool.

Due to not adherence of complete Infrastructure , party refused to pay on their promissory note and brought action against the Pool Installation company for breach of contract

Promissory note also referred as promissory letter , is a legally binding document that highlights the agreement made between two or more parties . It is a legally binding document which obliges all the involved parties to perform the stated duties or payment as per the agreement .

Normally promissory notes are two types- Collateral or secured promissory note and Unsecured .

In this case Promissory note issued to finance Pool . The security allows bank to seizure specified assets .

In this case , Parties needs to settle case with Pool Installation company separately but they have to release payment relates to Bank against Promissory note .They are legally liable to pay off liability