Requirements for an Enforceable Contract 1. 2. 3. 4. 5. 6. 7. 8. Offer-to loan Acceptance-of offer to loan Mutual Consideration-on offeror...

and offeree Mutual Intention-on offeror...and offeree Capacity-over age eighteen...of sound mind Legal Object- free of fraud In Writing if Required Privity- the relation privies...obsolete..privacy

Promissory Note Note Mortgage Maritime Lien There are two principal qualities essential to the validity of a note; first, that it be payable at all events, not dependent on any contingency; nor payable out of any particular fund. And, secondly, it is required that it be for the payment of money only; and not in bank notes, though it has been held differently in the state of New York. A promissory note payable to order or bearer passes by indorsement PROMISSORY NOTE defined: contracts. A written promise to pay a certain sum of money, at a future time, unconditionally. 7 Watts & S. 264; 2 Humph. R. 143; 10 Wend. 675; Minor, R. 263; 7 Misso. 42; 2 Cowen, 536; 6 N. H. Rep. 364; 7 Vern. 22. A promissory note differs from a mere acknowledgment of debt, without any promise to pay, as when the debtor gives his creditor an I 0 U. (q.v.) See 2 Yerg. 50; 15 M. & W. 23. But see 2 Humph. 143; 6 Alab. R. 373. In its form it usually contains a promise to pay, at a time therein expressed, a sum of money to a certain person therein named, or to his order, for value received. It is dated and signed by the maker. It is never under seal. 2. He who makes the promise is called the maker, and he to whom it is made is the payee. Bayley on Bills, 1; 3 Kent, Com, 46. 3. Although a promissory note, in its original shape, bears no resemblance to a bill of exchange; yet, when indorsed, it is exactly similar to one; for then it is an order by the indorser of the note upon the maker to pay to the indorsee. The indorser is as it were the drawer; the maker, the acceptor; and the indorsee, the payee. 4 Burr. 669; 4 T. R. 148; Burr. 1224. 4. Most of the rules applicable to bills of exchange, equally affect promissory notes. No particular form is requisite to these instruments; a promise to deliver the money, or to be accountable for it, or that the payee shall have it, is sufficient. Chit. on Bills, 53, 54. 5. There are two principal qualities essential to the validity of a note; first, that it be payable at all events, not dependent on any contingency; 20 Pick. 132; 22 Pick. 132 nor payable out of any particular fund. 3 J. J. Marsh. 542; 5 Pike, R. 441; 2 Blackf. 48; 1 Bibb, 503; 1 S. M. 393; 3 J. J. Marsh. 170; 3 Pick. R. 541; 4 Hawks, 102; 5 How. S. C. R. 382. And, secondly, it is required that it be for the payment of money only; 10 Serg. & Rawle, 94; 4 Watts, R. 400; 11 Verm. R. 268; and not in bank notes, though it has been held differently in the state of New York. 9 Johns. R. 120; 19 Johns. R. 144. 6. A promissory note payable to order or bearer passes by indorsement, and although a chose in action, the holder may bring suit on it in his own name. Although a simple contract, a sufficient consideration is implied from the nature of the instrument. Vide 5 Com. Dig. 133, n., 151, 472 Smith on Merc. Law, B. 3, c. 1; 4 B. & Cr. 235 7 D. P. C. 598; 8 D. P. C. 441 1 Car. & Marsh. 16. Vide Bank note; Note; Reissuable note. A Law Dictionary Adapted To The Constitution And Laws

Of The United States Of America And Of The Several States Of The American Union by: John Bouvier Revised Sixth Edition, 1856 SEISED defined: or seise: to put in possession of property or vest with the right of possession or succession seized of land > 2): to take possession or custody of (property) esp. by lawful authority <seize drugs as evidence > seize the interest or property subject to forfeiture Federal Rules of Criminal Procedure Rule 32(b)(2)> seize the goods subject to his security interest and keep them in satisfaction of the debt J. J. White and Railroad S. Summers > compare FORECLOSE, REPOSSESS CONVEYED defined: - Law: To transfer ownership of or title to. Has the right to mortgage, grant and convey the Property and that the Property is unencumbered, except for encumbrances of record unencumbered Property that is not subject to any creditor claims or liens. For example, if a house is owned free and clear (meaning the owner owes no mortgage to anyone), it is unencumbered. Also, if a person were to buy stocks with cash rather than on margin, it is unencumbered. BORROWER warrants and will defend generally the title to the Property against all claims and demands, subject to any encumbrances of record. WARRANTS defined: - Law To guarantee clear title to (real property). Generally - Without reference to particular instances or details; not specifically: generally speaking. SECURITY INSTRUMENT defined: In a mortgage, the mortgagor, a person or entity with ownership rights in real property (usually, but not always the debtor on the underlying obligation), grants a lien on the real property to the mortgagee, the person or entity to whom the debt is owed. Once the debt is paid, the mortgagee records a document (e.g. certificate of discharge) indicating that the lien is discharged. In a deed of trust, the trustor is the person or entity with ownership rights in real property (usually, but not always the debtor on the underlying obligation). The trustor grants a lien to a trustee (often a title company). The trustee holds the lien in trust for a beneficiary, the person or entity to whom the debt is owed. Once the debt is paid, the trustee reconveys the deed of trust to the trustor. GRANT defined: Law -a transfer of property by deed. MORTGAGE defined: mortgage (n.) 1390, from O.Fr. morgage (13c.), mort gaige, lit. "dead pledge" (replaced in modern Fr. by hypothque), from mort "dead" + gage "pledge;" so called because the deal dies either when the debt is paid or when payment fails. O.Fr. mort is from V.L. *mortus "dead," from L. mortuus, pp. of mori "to die" (see mortal).= 2 0 The verb is first attested 1467. TRUSTOR defined: noun Law. a person who creates a trust. SETTLOR defined: noun Law. a person who makes a settlement of property. SETTLEMENT defined: Law. a. final disposition of an estate or the like. b. the settling of property, title, etc., upon a person. c. the property so settled. BENEFICIARY defined: One that receives a benefit: I am the beneficiary

of your generosity. The recipient of funds, property, or other benefits, as from an insurance policy or will. Ecclesiastical the holder of a benefice. An individual, institution, trustee, or estate, which receives, or may become eligible to receive, benefits under a will, insurance policy, retirement plan, annuity, trust, or other contract. ESTATE defined: the interest of a particular degree, nature, quality, or extent that one has in land or other property compare FEE future interest at INTEREST, REMAINDER, REVERSION, TENANCY. FEE SIMPLE defined: 1292, from O.Fr. fieu, from M.L. feodum "land or other property whose use is granted in return for service," probably from Frank. *fehu-od "payment-estate," in which the first element is cognate with O.E. feoh "money, property, cattle" (also Ger. Vieh "cattle," Goth. faihu "money, fortune"), from PIE *peku- "cattle" (cf. Skt. pasu, Lith. pekus "cattle;" L. pecu "cattle," pecunia "money, property"); second element similar to O.E. ead "wealth." Sense of "payment for services" first recorded c.1390. Fee-simple is "absolute ownership," as opposed to fee-tail "entailed ownership," inheritance limited to some particular class of heirs (from O.Fr. taillir "to cut, to limit"). PRIVITY defined: privity noun, plural - ties. 1. private or secret knowledge. 2. participation in the knowledge of something private or secret, esp. as implying concurrence or consent. 3. Law. the relation between privies.- Law. a person participating directly in or having a derivative interest in a legal transaction. 4. Obsolete. privacy. PRIVY defined: Law One of the parties having an interest in the same matter. HYPOTHEQUE defined: French law. Properly, the right acquired by the creditor over the immovable property which has been assigned to him by his debtor, as security for his debt, although he be not placed in possession of it. The hypotheque might arise in two was. 1. By the express agreement of the debtor, which was the conventional hypotheque. 2. By disposition of law, which was the implied or legal hypotheque. This was nothing but a lien or privilege which the creditor enjoyed of being first paid out of the land subjected to this incumbrance. For example, the landlord had hypotheque on the goods of his tenant or others, while on the premises let. A mason had the same on the house he built. A pupil or a minor on the land of his tutor or curator, who had received his money. Domat, Loix Civiles, 1. 3, & 1; 2 Bouv. Inst. 1817. A Law Dictionary Adapted To The Constitution And Laws Of The United States Of America And Of The Several States Of The American Union by: John Bouvier Revised Sixth Edition, 1856 VESSEL defined: A ship, brig, sloop, or other craft used, or capable of being used, in navigation on water. In order to be a "vessel," for purposes of an action under Jones Act, the structure's purpose must to some reasonable degree be the transportation of passengers, cargo or equipment from place to place across navigable waters. Buna v. Pacific Far East Line, Inc., D.C.Cal., 441 F.Supp. 1360, 1364. Though, the term "vessel," in admiralty law, is not limited to ships or vessels engaged in commerce. St. Hilaire Moye v. Henderson, C.A.Ark., 496 F.2d 973,

979. Many special purpose craft, such as dredges, floating derricks and barges equipped for special purposes or operations are "vessels" within meaning of Jones Act, and persons regularly employed aboard such a vessel in aid of its purposes are "seamen." Hill v. Diamond, C.A.Va., 311 F.2d 789, 791, 792. On the other hand, however, everything that floats is not necessarily a "vessel," in purview of Jones Act. Bennett v. Perini Corp., C.A.Mass., 510 F.2d 114, 116. For example, a floating dry dock which was moored by chains and cables to shipyard dock at time of injury to shipyard employee and which was in use as a dry dock was not a "vessel" and therefore no warranty of seaworthiness arose. Keller v. Dravo Corp., C.A.La., 441 F.2d 1239, 1244. Blacks Law Dictionary Sixth Edition (page 1562, 1563). UNCITRAL-United Nations Convention On International Trade Law International Convention on Maritime Liens and Mortgages (Geneva, 6 May 1993) The States Parties To This Convention: CONSCIOUS of the need to improve conditions for ship financing and the development of national merchant fleets; RECOGNIZING the desirability of international uniformity in the field of maritime liens and mortgages, and therefore; CONVINCED of the necessity for an international legal instrument governing maritime liens and mortgages; HAVE DECIDED to conclude a Convention for this purpose and have therefore agreed as follows: Article 1 Recognition and enforcement of mortgages, "hypothques" and charges Mortgages, "hypothques" and registrable charges of the same nature, which registrable charges of the same nature will be referred to hereinafter as "charges", effected on seagoing vessels shall be recognized and enforceable in States Parties provided that: (a) Such mortgages, "hypothques" and charges have been effected and registered in accordance with the law of the State in which the vessel is registered; (b) The register and any instruments required to be deposited with the registrar in accordance with the law of the State in which the vessel is registered are open to public inspection, and that extracts from the register and copies of such instruments are obtainable from the registrar; and (c) Either the register or any instruments referred to in subparagraph (b) specifies at least the name and address of the person in whose favour the mortgage, "hypothque" or charge has been effected or that it has been issued to bearer, the maximum amount secured, if that is a requirement of the law of the State of registration or if that amount is specified in the instrument creating the mortgage, "hypothque" or charge, and the date and other particulars which, according to the law of the State of registration, determine the ranking in relation to other registered mortgages, "hypothques" and charges. Article 2 Ranking and effects of mortgages, "hypothques" and charges The ranking of registered mortgages, "hypothques" or charges as between themselves and, without prejudice to the provisions of this Convention, their effect in regard to third parties shall be determined

by the law of the State of registration; however, without prejudice to the provisions of this Convention, all matters relating to the procedure of enforcement shall be regulated by the law of the State where enforcement takes place. Article 3 Change of ownership or registration 1. With the exception of the cases provided for in articles 11 and 12, in all other cases that entail the deregistration of the vessel from the register of a State Party, such State Party shall not permit the owner to deregister the vessel unless all registered mortgages, "hypothques" or charges are previously deleted or the written consent of all holders of such mortgages, "hypothques" or charges is obtained. However, where the deregistration of the vessel is obligatory in accordance with the law of a State Party, otherwise than as a result of a voluntary sale, the holders of registered mortgages, "hypothques" or charges shall be notified of the pending deregistration in order to enable such holders to take appropriate action to protect their interests; unless the holders consent, the deregistration shall not be implemented earlier than after a lapse of a reasonable period of time which shall be not less than three months after the relevant notification to such holders. 2. Without prejudice to article 12, paragraph 5, a vessel which is or has been registered in a State Party shall not be eligible for registration in another State Party unless either: (a) A certificate has been issued by the former State to the effect that the vessel has been deregistered; or (b) A certificate has been issued by the former State to the effect that the vessel will be deregistered with immediate effect, at such time as the new registration is effected. The date of deregistration shall be the date of the new registration of the vessel. Article 4 Maritime liens 1. Each of the following claims against the owner, demise charterer, manager or operator of the vessel shall be secured by a maritime lien on the vessel: (a) Claims for wages and other sums due to the master, officers and other members of the vessel's complement in respect of their employment on the vessel, including costs of repatriation and social insurance contributions payable on their behalf; (b) Claims in respect of loss of life or personal injury occurring, whether on land or on water, in direct connection with the operation of the vessel; (c) Claims for reward for the salvage of the vessel; (d) Claims for port, canal, and other waterway dues and pilotage dues; (e) Claims based on tort arising out of physical loss or damage caused by the operation of the vessel other than loss of or damage to cargo, containers and passengers' effects carried on the vessel. 2. No maritime lien shall attach to a vessel to secure claims as set out in subparagraphs (b) and (e) of paragraph 1 which arise out of or result from: (a) Damage in connection with the carriage of oil or other hazardous or noxious substances by sea for which compensation is payable to the claimants pursuant to international conventions or national law providing for strict liability and compulsory insurance or other means of securing the claims; or (b) The radioactive properties or a combination of radioactive properties with toxic, explosive or other hazardous properties of nuclear fuel or of radioactive products or waste.

Article 5 Priority of maritime liens 1. The maritime liens set out in article 4

shall take priority over registered mortgages, "hypothques" and charges, and no other claim shall take priority over such maritime liens or over such mortgages, "hypothques" or charges which comply with the requirements of article 1, except as provided in paragraphs 3 and 4 of article 12. 2. The maritime liens set out in article 4 shall rank in the order listed, provided however that maritime liens securing claims for reward for the salvage of the vessel shall take priority over all other maritime liens which have attached to the vessel prior to the time when the operations giving rise to the said liens were performed. 3. The maritime liens set out in each of subparagraphs (a), (b), (d) and (e) of paragraph 1 of article 4 shall rank pari passu as between themselves. 4. The maritime liens securing claims for reward for the salvage of the vessel shall rank in the inverse order of the time when the claims secured thereby accrued. Such claims shall be deemed to have accrued on the date on which each salvage operation was terminated. Article 6 Other maritime liens Each State Party may, under its law, grant other maritime liens on a vessel to secure claims, other than those referred to in article 4, against the owner, demise charterer, manager or operator of the vessel, provided that such liens: (a) Shall be subject to the provisions of articles 8, 10 and 12; (b) Shall be extinguished (i) after a period of 6 months, from the time when the claims secured thereby arose unless, prior to the expiry of such period, the vessel has been arrested or seized, such arrest or seizure leading to a forced sale; or (ii) at the end of a period of 60 days following a sale to a bona fide purchaser of the vessel, such period to commence on the date on which the sale is registered in accordance with the law of the State in which the vessel is registered following the sale; whichever period expires first; and (c) Shall rank after the maritime liens set out in article 4 and also after registered mortgages, "hypothques" or charges which comply with the provisions of article 1. Article 7 Rights of retention 1. Each State Party may grant under its law a right of retention in respect of a vessel in the possession of either: (a) A shipbuilder, to secure claims for the building of the vessel; or (b) A ship-repairer, to secure claims for repair, including reconstruction of the vessel, effected during such possession. 2. Such right of retention shall be extinguished when the vessel ceases to be in the possession of the shipbuilder or ship-repairer, otherwise than in consequence of an arrest or seizure. BONA FIDE PURCHASER defined: One who has purchased property for value without any notice of any defects in the title of the seller. Walters v. Calderon, 25 Cal.App.3d 863, 102 Cal.Rptr. 89, 97. One who pays valuable consideration, has no notice of outstanding rights of others, and acts in good faith. J. C. Equipment, Inc. v. Sky Aviation, Inc., Mo. App., 498 S.W.2d 73, 75. Bona fide purchaser for value is one who, without notice of another's claim of right to, or equity in, property prior to his acquisition of title, has paid vendor a valuable consideration. Snuffin v. Mayo, 6 Wash.App. 525, 494 P.2d 497. One who buys property or to whom a negotiable document of title is transferred in good faith and without notice of any defense or claim to the property or document. U.C.C. 7-501. One who takes trust property for value and without notice of breach of trust and who is not

knowingly part of an illegal transaction. Restatement, Second, Trusts 284; Vniform Probate Code 2-202(3).