A Negotiable Instrument means " a written document transferable by deliver".
Let me use the example of promissory note where one executes a promissory note as evidence of a promise to pay another person a sum of money at a particular date.
If it says in the terms that it is a negotiable promissory note the lender can sell it to a third party who will assume the responsibility of collecting the money promised by the borrower. It is an advantage because the lender need not wait for the due date to come before he may obtain money. Of course, in order to sell a promissory note, the lender usually sell it at a price that is lower than the maturity value or the money promised. This is to provide incentive for the buyer to buy the instrument at an expected profit. To negotiate it, the lender must endorse it to the buyer or indicate that the lender is transferring his right as collector to another person who is called a "holder in due course". This new lender assumes all the rights of a lender as described in the note. If this new lender needs the money before the maturity of the note, he may sell it to another person and so on and so on.
The disadvantage is if someone finds the promissory note and forges the signature of the lender, and present fraudulent identification papers, he can show himself as if he obtained the instrument properly and has the right to sell the instrument to another and in this regard defraud the true lender.
To obtain the advantages and protect oneself from disadvantages, one has to resort to other measures to prevent fraudulent negotiation.
Short advantage and disadvantages of negotiable instruments
1. it enables creditors to obtain cash by discounting the bill.
2. it encourages expansion of trade,particularly in international trade.
A Negotiable Instrument means " a written document transferable by deliver".
first it helps you in the daily transaction like in the services you have availed
second it provides knowledge about negotiation
and lastly it tells how important things can be
negotiable instruments are freely transferable in terms of ownership from one holder to another
Wayne K. Lewis has written: 'Illinois law of negotiable instruments' -- subject(s): Negotiable instruments 'Negotiable instruments and other payment systems' -- subject(s): Negotiable instruments, Problems, exercises, Problems, exercises, etc
Dudley Richardson has written: 'A Guide to Negotiable Instruments' 'A simple guide to negotiable instruments and the Bills of Exchange acts' -- subject(s): Bills of exchange, Negotiable instruments
Leonard Gering has written: 'Handbook on the law of negotiable instruments' -- subject(s): Negotiable instruments
Brian Conrick has written: 'MJL Rajanayagam's The law of negotiable instruments in Australia' -- subject(s): Negotiable instruments
Heman Gerald Chapin has written: 'Bankers' forms and the negotiable instruments law' -- subject(s): Negotiable instruments
Kazi Abdul-Aziz has written: 'Commentary on the Negotiable instruments act, 1881' -- subject(s): Negotiable instruments
Time deposits are negotiable instruments. These are written orders or conditional promise to pay a fixed sum of money on demand or at a certain time.
Craig W. Smith has written: 'Negotiable instruments and the payments mechanism' -- subject(s): Negotiable instruments, Banking law, Checks
Ramkrishna R. Vyas has written: 'The Negotiable Instruments Act, 1881 (XXVI of 1881)' -- subject(s): Negotiable instruments, Check fraud
Robert L. Jordan has written: 'Secured transactions in personal property' -- subject(s): Cases, Personal property, Security (Law) 'Negotiable instruments and letters of credit' -- subject(s): Cases, Letters of credit, Negotiable instruments 'Negotiable instruments, payments and credits' -- subject(s): Cases, Check collection systems, Law and legislation, Letters of credit, Negotiable instruments 'New Members of the Family'
types of negotiable instruments are drafts ,checks,notes,and certificates of deposit# Types of negotiable instruments are 1.drafts -An order by one person to another person or to bear, 2.check- A draft drawn on a bank and payable on demand to bearer, 3. certificates of deposit- A note made by a bank acknowledging a deposit of funds made payable to the holder of the note, and 4. Note- A promise by one party to pay money to another party or to bearer.
Approved Commercial or Investment Bank issued Negotiable Instruments of Deposit (NID).