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When endorsed (alt. spelling "indorsed"), a promissory note is a negotiable instrument. This is how banks fund mortgages--the promissory note is endorsed to them, making it a negotiable instrument (i.e., a check) which they then list as a deposit in their books. Concurrently, they provide a "funding check" to the seller or seller's agent. In this way, the bank's books are brought into balance.
A promissory note is generally thought of as a glorified IOU--which it more or less is--but a lesser known fact (by the general public) is that when endorsed, it becomes a negotiable instrument, i.e. a check or bill of exchange.
All over the internet, there are good discussions on the implications of mortgage promissory notes and whether or not the situation described above is fraudulent. An interesting discussion above...which may or may no be exactly correct. To the original question: Not all promissory notes are or can be negotiable instruments. ANY P-Note may have the term added that it is NOT negotiable, by agreement of the parties at origination or some point thereafter. this isvery, very common with these instruments when used in family, closely held corporation, etc situations. Or, also common, an instrument may just have who it can be negotiated by restricted...like to members of a club or group...also common. While an open endorsement makes an instrument freely negotiable by the next person to put their name on it...a restricted endorsement (like endorsing acheck with the terms "for deposit to the account of ABC Co only", restricts it to that. (That is why you will see that as he common endorsement on the stamp that most businesses use...even if the endorsed check is stolen or "mis-routed", it is useless to anyone else.)
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What is Currency notes?
A currency note is a banknote -- a type of negotiable instrument known as a promissory note, made by a bank, payable to the bearer on demand.
Is contract note a negotiable instrument?
No, a contract note is not considered a negotiable instrument. A contract note serves as a record of a transaction between parties, typically in financial markets, detailing the terms of the trade. Unlike negotiable instruments such as checks or promissory notes, which can be transferred or assigned to others, contract notes are generally non-transferable and specific to the involved parties.
Is gold a negotiable instrument?
Gold itself is not considered a negotiable instrument in the traditional sense, as it is a physical commodity rather than a financial document. Negotiable instruments, such as checks or promissory notes, represent a promise to pay a specific amount of money and can be transferred between parties. However, gold can be traded and exchanged in various forms, such as bullion or coins, and can be used as a medium of exchange or store of value. In that context, while it is not a negotiable instrument, it does possess attributes that allow it to be readily traded.
Is LC negotiable instrument?
A Letter of Credit (LC) is not considered a negotiable instrument in the same way that checks or promissory notes are. Instead, it is a financial document issued by a bank that guarantees payment to a seller, provided that the seller meets the specified terms and conditions. While the rights under an LC can be transferred or assigned, the instrument itself does not allow for transfer in the same manner as traditional negotiable instruments. Thus, while it can be used in trade finance, it does not possess the same characteristics as negotiable instruments.
Is a marriage certificate a negotiable instrument?
No, a marriage certificate is not a negotiable instrument. A negotiable instrument, such as a check or promissory note, is a written document that guarantees the payment of a specific amount of money to the holder. In contrast, a marriage certificate serves as a legal proof of marriage and does not represent a financial value or transferable right.
Is demand draft a negotiable instrument?
A demand draft is considered a negotiable instrument, but it is not as freely transferable as a cheque. It is a written order by one bank to another to pay a specified amount to a third party on demand. While it can be transferred, it typically requires the endorsement of the payee, making it less flexible than other negotiable instruments like promissory notes or cheques. Overall, it provides a secure and reliable means of payment.
What has the author J J MacLaren written?
J. J. MacLaren has written: 'Bills, notes and cheques' -- subject(s): Negotiable instruments, Checks, Law and legislation, Bills of exchange, Promissory notes, Canada 'Maclaren's Bills, notes and cheques' -- subject(s): Negotiable instruments, Checks
What are the different types of negotiable and non negotiable instruments?
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.
What do you mean by hundis?
Hundis are negotiable instruments written in hindustani language. Sometimes they are in the form of promissory notes but usually they are like bills of exchange in form and substance.
What is issue negotiable instrument?
An issue negotiable instrument refers to a financial document that promises payment to a specified person or bearer, which can be transferred to others through endorsement or delivery. Common examples include checks, promissory notes, and bills of exchange. These instruments must meet certain legal criteria to be considered negotiable, such as being in writing, signed by the maker or drawer, and containing an unconditional promise to pay a fixed amount of money. Their negotiability allows for easy transferability, making them useful in commercial transactions.
Examples of credit instrument?
A credit instrument is something that can be used instead of money. Some examples are promissory notes, checks, and credit cards.
What has the author Sir John Barnard Byles written?
Sir John Barnard Byles has written: 'A treatise of the law of bills of exchange, promissory notes, bank-notes and checks' -- subject(s): Negotiable instruments
