The Supreme Court held that binding arbitration agreements ...

[luvbio]

The Supreme Court held that binding arbitration agreements between investors and investment firms:
 a. violate basic rights of investors
  b. defraud investors under the securities law
  c. are legal only if the investors may first litigate claims d. are unconscionable
  e. are legal

Question 2

Negotiability. Regent Corp, U.S.A., an import company in New York, contracted with Azmat Bangladesh, Ltd., a textile company in Bangladesh, for the purchase of bed sheets and pillowcases for import and resale in the United States. An essential condition of the sale was that the goods be manufactured in Bangladesh. The contract required payment by Regent within ninety days of the date on the bill of lading, and Regent issued promissory notes that indicated this term. After the goods were shipped, Azmat's bank presented drafts drawn against Regent to Regent's banks. Like the notes, each draft indicated that payment was to be made at 90 days deferred from bill of lading date. The drafts were accompanied by dated bills of lading. On delivery of the goods, U.S. Customs refused to allow their entry because they were partially manufactured in Pakistan. Regent filed a suit in a New York state court against its banks, and Azmat, to stop payment on the drafts. One of the issues was whether the notes and drafts were payable at a definite time. How should the court rule on this issue? Explain fully.

[zogaridan]

Answer to Question 1

e

Answer to Question 2

Negotiability
Regent filed a motion for summary judgment, which the court granted. The court found that each draft declared on its face that it was payable a specified number of days after the bill of lading date, which was on another writing. For this reason, the drafts were nonnegotiable instruments. On appeal, a state intermediate appellate court reversed this part of the judgment. The court acknowledged that a negotiable instrument must be payable on demand or at a definite time. Definite time is defined in part by UCC 3-109(1)(b) as a fixed period after sight. The court reasoned that while the indicia of negotiability must be visible on the face of the instrument, a note containing an otherwise unconditional promise is not made conditional merely because it refers to, or states that it arises from, a separate agreement or transaction. In this case, the drafts were payable at fixed periods after sight in conformity with UCC Section 3-109(1)(b). Thus, they were payable within 90 days of the dated bills of lading which accompanied them. The notes, which are by their terms to be paid a certain number of days after the date of the bill of lading, are, therefore, negotiable and the mere reference to the bill of lading date does not impair the note's negotiability.