From: Duncan Frissell <frissell@panix.com>
Date: Wed, 23 Mar 94 11:01:10 PST
To: CYPHERPUNKS@toad.com
Subject: Promise her anything...
Message-ID: <199403231900.AA14983@panix.com>
MIME-Version: 1.0
Content-Type: text/plain



H>A few days ago I said I'd look up the legal requirements on promissory 
H>notes.

There are two separate issues in your post -- a promissory note and a 
negotiable instrument.

A promissory note is simply a promise to pay someone else something of 
value.  In order to be valid, the note has to contain enough information 
so that a court (or arbitrator) can determine that the maker of the note 
intended to create a debt, that we can determine the amount, and that we 
can determine to whom it is owed and when it is due.

A negotiable instrument is a debt instrument that can be sold (negotiated) 
and if sold to a "holder in due course" (someone who buys the note for 
value and without knowledge of any disputes) can be collected on its face 
terms and without reference to any counter claims between the original 
maker and the original creditor.

This aspect of negotiable instrument law has caused some libertarians to 
oppose the concept of negotiability.

The Black Letter phrase from my Commercial Paper class in law school:

----------
Negotiable Instrument:  A promise to pay to order or bearer a sum certain 
in money on or after a date certain.
----------

Note that bearer notes were always specifically included in the 
definition.

H>This was to see whether digital cash or similar instruments could 
H>implement digital promissory notes.

Yes, they could.

DCF


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