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Real and Personal Defense (Law3)

This document outlines several key distinctions between different types of defenses that can be used in response to actions regarding negotiable instruments. It distinguishes between personal defenses, which can only be used by the direct parties to the contract, and real defenses, which can be used by anyone involved. Some examples of real defenses included forgery, material alteration of the instrument, and the underlying contract being illegal. Personal defenses included things like failure of consideration, absence of consideration, and infancy or minority of the signer. The document provides comparisons of these different defenses in terms of their nature, who can commit them, and their implications for contractual authority and liability.

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Angelene Mangubat
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237 views3 pages

Real and Personal Defense (Law3)

This document outlines several key distinctions between different types of defenses that can be used in response to actions regarding negotiable instruments. It distinguishes between personal defenses, which can only be used by the direct parties to the contract, and real defenses, which can be used by anyone involved. Some examples of real defenses included forgery, material alteration of the instrument, and the underlying contract being illegal. Personal defenses included things like failure of consideration, absence of consideration, and infancy or minority of the signer. The document provides comparisons of these different defenses in terms of their nature, who can commit them, and their implications for contractual authority and liability.

Uploaded by

Angelene Mangubat
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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DISTINCTIONS OF PERSONAL AND REAL DEFENSES

Distinction Breach of Authority Want of Authority


As to defense Personal Real
Did not follow requisites
As to defect Incomplete instrument
(Sec.19/20)
Holder/Agent has no
Holder has authority to
As to authority authority to transact on
complete the instrument
behalf of Principal

Distinction Forgery Material Alteration


As to defense Real Real
Altered/changed the date,
As to concept Forged signature amount, currency, place of
payment, etc.
Forger and parties subsequent Primarily and Secondarily liable
to forgery is liable; Maker is also person is not liable; only the
As to liability liable when signature of bearer person who authorized the
in an indorsed instrument is alteration, person who altered and
forged subsequent indorsers
As to who Either one of the parties or a
Made by parties
commits stranger

Distinction Material Alteration Spoliation


As to defense Real Personal
As to who commits Made by parties Made by stranger

Distinction Insertion of wrong date Material Alteration


As to defense Personal Real
Changed either the date,
Intentionally inserted a wrong
As to concept amount, currency, place of
date
payment, etc.
As to authority Authorized to insert Not authorized

Failure of Absence of
Distinction
Consideration Consideration
As to defense Personal Personal
Failure of agreed
No consideration was made,
As to concept consideration to
or consideration is illegal
materialized
Valid when formed but
As to effect As if no contract formed
unenforceable

Failure in Factum / Fraud


Distinction Fraud in inducement
in esse contractus
As to defense Real Personal
Have knowledge about the
Deceived as to the character of character of instrument but
As to concept the instrument and without was induced by fraudulent
knowledge of it statement to enter into the
contract
As to effect Instrument is void Instrument is voidable

Incomplete but Incomplete but Complete but


Distinction
Delivered Undelivered undelivered
As to defense Personal Real Personal
Incomplete in form Complete in form
Incomplete in form
As to concept but already but not yet delivered
and undelivered
delivered to another to another
Can be delivered
but the
Holder has authority No authority to
As to authority maker/drawer can
to fill up the blanks complete and deliver
cancel before such
delivery
Not valid contract in
Valid and effectual
the hands of ANY Instrument is
for all purpose if
As to effect holder as against the inoperative until
made within
person who signed authorized delivery
authority
the instrument

Illegality of
Distinction Illegality of Contract
Maker/Drawer
As to defense Real Personal
Underlying contract for
Illegality is committed by
As to concept which the instrument was
the maker/drawer
issued illegal

Distinction Minority / Infancy Ultra vires Act


As to defense Real Real
A person acts / sign
Maker or drawer is a minor
As to concept outside the power given to
/ incapacitated person
him
Minor / incapacitated
As to liability Corporation is not liable
person is not liable

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