Define: Negotiable Instrument

A negotiable instrument is a written document that promises to pay a specific amount of money to the bearer or to a designated person.

The most common types of negotiable instruments are checks, promissory notes, and bills of exchange.

A negotiable instrument must be in writing, signed by the maker or drawer, contain an unconditional promise or order to pay a specific amount of money, be payable on demand or at a specific time, and be payable to the bearer or to a specific person.

A bearer instrument is payable to whoever holds the instrument, while an order instrument is payable to a specific person or their order.

The rights and liabilities of parties involved in a negotiable instrument are governed by the rules of negotiable instruments law, which include the rights of the holder, the liability of the maker or drawer, and the liability of the endorsers.

Yes, a negotiable instrument can be transferred to another party through endorsement and delivery.

Enforcing a negotiable instrument typically involves presenting the instrument for payment, giving notice of dishonor if the instrument is not paid, and taking legal action if necessary.

Dishonoring a negotiable instrument can result in legal action, including the possibility of being held liable for the amount of the instrument plus any damages.

A negotiable instrument can be cancelled or revoked by the person who issued it, but this must be done in accordance with the rules of negotiable instruments law.

If you receive a negotiable instrument that appears to be fraudulent or counterfeit, you should contact the issuer or drawer of the instrument and report the situation to the appropriate authorities.