Reference no: EM131210356

Negotiable Instruments (also called commercial paper) are vital to the functioning of modern commerce. How do we create a negotiable instrument? Is the Instrument in the case below a negotiable instrument? Why or why not?

Reference to Another Document J. Monte Williamson was the owner of a 16.65 percent interest in Lake Manor Associates, a partnership. Williamson agreed to sell his interest to H. Louis Salomonsky and Tiffany H. Armstrong in exchange for shares of a certain stock valued at $15 per share and a non-interest-bearing note in the amount of $4,000 for the balance. The notes were executed and contained the following notation: "For value received, the undersigned promises to pay to the order of J. Monte Williamson the principal sum of $4,000 payable as set forth in that certain agreement, an executed copy of which is attached hereto."

The agreement referred to in the notes listed conditions that had to be met to cause the notes to become due. Five years after the notes were executed, Salomonsky and Armstrong claimed that because the notes were negotiable instruments, the statute of limitations on the enforcement of the notes has run. Are these notes negotiable instruments? Salomonsky v. Kelly, 232 Va. 261, 349 S.E.2d 358, Web 1986 Va. Lexis 253 (Supreme Court of Virginia)