Person Entitled to Enforce a Note
Under UCC Article 3, the right to enforce a negotiable note belongs to a “person entitled to enforce” — a status that turns on possession and the holder rules, not on ownership alone.
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Holder in Due Course
A holder in due course is a holder who takes a negotiable instrument for value, in good faith and without notice of certain problems — and as a result takes it free of many defenses.
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Assignments of Notes, Mortgages and Receivables
An assignment transfers rights from one party (the assignor) to another (the assignee). In lending, loans, mortgages and receivables are routinely assigned, sold and transferred.
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Forward flow agreement
A contract under which a seller agrees to sell, and a buyer to buy, receivables on a recurring schedule on terms set in advance.
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Debt buyer
A company that purchases debts, often charged-off consumer debts, from the original creditor or another owner.
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Demurrer
In California and some other states, a pleading that challenges the legal sufficiency of a complaint, similar to a federal motion to dismiss for failure to state a claim.
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Sovereign citizen
A label for people who claim they are not subject to government authority or courts unless they consent. We have not found a court decision upholding these claims.
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Legal tender
Money that the law recognizes as a valid offer of payment for debts. Under 31 U.S.C. § 5103, U.S. coins and currency, including Federal Reserve notes, are legal tender for all debts, public charges, taxes and dues. According to the Federal Reserve, this means U.S. money is a valid and legal offer of payment for debts when tendered to a creditor, but no federal statute requires a private business to accept cash as payment for goods or services; state or local law may.
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Admiralty
The body of law governing maritime matters such as ships, cargo and navigable waters, and the jurisdiction of courts over those cases.
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Sui juris
Having full legal capacity to manage one’s own affairs, as opposed to a minor or a person under guardianship.