Waiver Of Demand

AAA

DEFINITION of 'Waiver Of Demand'

An agreement by the party that has endorsed a check or draft to accept legal responsibility, without being formally notified, should the original issuer of the check or draft default. The waiver of demand may be express or implied; it may also be oral or written unless oral waivers are specifically prohibited by law.

INVESTOPEDIA EXPLAINS 'Waiver Of Demand'

The term also refers to a bank's waiver of its right to formal notification when it presents short-term negotiable debt instruments such as drafts or banker's acceptances to a Federal Reserve bank for rediscounting. In such instances, the Federal Reserve considers the bank's endorsement as a "waiver of demand, notice and protest" if the original issuer defaults on its debt obligation.

RELATED TERMS
  1. Federal Reserve Bank

    The central bank of the United States and the most powerful financial ...
  2. Waiver Of Coinsurance Clause

    Language in an insurance policy that says the insurance company ...
  3. Waiver Of Notice

    A legal document that waives the right to formal notification. ...
  4. Discount Note

    A short-term debt obligation issued at a discount to par. Discount ...
  5. Banker's Acceptance - BA

    A short-term debt instrument issued by a firm that is guaranteed ...
  6. Negotiable

    1. Describing the price of a good or security that is not firmly ...
RELATED FAQS
  1. How does your checking account affect your credit score?

    Your credit report provides a snapshot for prospective lenders, landlords and employers of how you handle credit. For any ... Read Full Answer >>
  2. What is the banking sector?

    The banking sector is the section of the economy devoted to the holding of financial assets for others, investing those financial ... Read Full Answer >>
  3. What's the difference between a letter of credit and a bank guarantee?

    Bank guarantees represent a more significant contractual obligation for banks than letters of credit do. A letter of credit ... Read Full Answer >>
  4. How do leverage ratios help to regulate how much banks lend or invest?

    Banks are among the most leveraged institutions in the United States; the combination of fractional-reserve banking and Federal ... Read Full Answer >>
  5. Can I use a prepaid credit card to pay bills or to transfer money to other accounts?

    Prepaid credit cards may be used to both pay bills, either as a one-time transaction or recurring transaction, and to transfer ... Read Full Answer >>
  6. What’s the difference between overdraft protection and overdraft settings?

    Overdrafting refers to the practice of granting short-term credit to an account holder when his or her balance reaches zero. ... Read Full Answer >>
Related Articles
  1. Bonds & Fixed Income

    The Treasury And The Federal Reserve

    Find out how these two agencies create policies to stimulate the economy in tough economic times.
  2. Mutual Funds & ETFs

    Why Money Market Funds Break The Buck

    These funds are noted for their safety in a rough market. Read on to find out why.
  3. Economics

    Explaining the Liquidity Coverage Ratio

    The liquidity coverage ratio requires banks and other financial institutions to hold enough cash and liquid assets on hand to weather market stress.
  4. Investing Basics

    Calculating the Tier 1 Capital Ratio

    The Tier 1 capital ratio is a measure of a depository financial institution’s financial health and capital adequacy.
  5. Savings

    Explaining Term Deposits

    A term deposit (more often called a certificate of deposit or CD) is a deposit account that is made for a specific period of time.
  6. Savings

    Bank Lingo: Routing Number Vs. Account Number

    Each consumer bank account has its own personal ID. And so does the bank. How do these numbers function and how do they protect the account holder?
  7. Investing Basics

    Do You Know These Odd Investing & Business Terms?

    Think investment talk is boring? There are plenty of terms to liven up any conversation about Wall Street and finance. You should try some of them out.
  8. Credit & Loans

    What is a Financial Institution?

    A financial institution is in business to, among other things, accept deposits, make loans, exchange currencies, and broker investment securities.
  9. Economics

    What Does Principal Mean?

    For banks, principal refers to the amount due on a loan, and is used to calculate interest payments.
  10. Economics

    Explaining Prime Rate

    Prime rate is the interest rate banks charge their best (e.g. prime) customers.

You May Also Like

Hot Definitions
  1. Nuncupative Will

    A verbal will that must have two witnesses and can only deal with the distribution of personal property. A nuncupative will ...
  2. OsMA

    An abbreviation for Oscillator - Moving Average. OsMA is used in technical analysis to represent the variance between an ...
  3. Investopedia

    One of the best-known sources of financial information on the internet. Investopedia is a resource for investors, consumers ...
  4. Unfair Claims Practice

    The improper avoidance of a claim by an insurer or an attempt to reduce the size of the claim. By engaging in unfair claims ...
  5. Killer Bees

    An individual or firm that helps a company fend off a takeover attempt. A killer bee uses defensive strategies to keep an ...
  6. Sin Tax

    A state-sponsored tax that is added to products or services that are seen as vices, such as alcohol, tobacco and gambling. ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!