Business Law 12th Edition by Roger LeRoy Miller ,Frank Cross

Exercise 1

Negotiability In October 1996, Robert Hildebrandt contracted with Harvey and Nancy Anderson to find a tenant for the Andersons' used-car lot. The Andersons agreed to pay Hildebrandt "a commission equal in amount to five percent up to first three years of lease." On December 12, Paramount Automotive, Inc., agreed to lease the premises for three years at $7,500 per month, and the Andersons signed a promissory note, which stated that they would pay Hildebrandt $13,500, plus interest, in consecutive monthly installments of $485 until the total sum was paid. The note contained an acceleration clause. In a separate agreement, Paramount promised to pay $485 of its monthly rent directly to Hildebrandt. Less than a year later, Paramount stopped making payments to all parties. To enforce the note, Hildebrandt filed a suit in an Oregon state court against the Andersons. One issue in the case was whether the note was a negotiable instrument. The Andersons claimed that it was not, because it was not "unconditional," arguing that their obligation to make payments on the note was conditioned on their receipt of rent from Paramount. Are the Andersons correct? Explain. [ Hildebrandt v. Anderson, 180 Or.App. 192, 42 P.3d 355 (2002)]