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Overview of Commercial Paper
Commercial paper is a document that promises to pay a sum of money to the holder or possessor of the instrument. It is very common to use commercial paper as consideration in a business transactions rather than cash. This chapter introduces commercial paper. It identifies the main types and requirements (elements) of commercial paper. It explains the rights of a holder or possessor of the commercial paper and the obligations of the payor of the instrument. It also provides for the rights of subsequent transferees or purchasers of the commercial paper. Notably, it introduces the concept of a holder in due course. Lastly, it provides for the potential liability of any maker, drawer, transferor, signor, or individual presenting the commercial paper for payment.