Negotiable Instruments
A negotiable instrument is a document guaranteeing the payment of a specific amount of money, either on demand or at a set time, with the payer named on the document. More specifically, it is a document contemplated by or consisting of a contract, which promises the payment of money without condition; which may be paid either on demand or at a future date. Negotiable Instruments are written contracts whose benefit could be passed on from its original holder to a new holder. It is a signed document that promises a sum of payment to a specified person or the assignee.
The term can have different meanings; depending on what law is being applied and what country it is used in and what context it is used in. The document may be used and interpreted in slightly different ways, depending on what country it is used in and what law is being applied, as well as its context.
Examples of negotiable instruments include promissory notes, bills of exchange, banknotes, and cheques.
Common Types of Negotiable Instruments are: Promissory notes, Bill of exchange, Cheques etc.
A cheek is considered a negotiable instrument. This type of instrument is a transferable, signed document that promises to pay the bearer a sum of money at a future date or on demand. It can be transferred from one person to another. Once the instrument is transferred, the holder obtains full legal title to the instrument.
