{"id":12012,"date":"2018-01-11T07:43:48","date_gmt":"2018-01-11T07:43:48","guid":{"rendered":"https:\/\/reunitethestates.org\/?page_id=12012"},"modified":"2018-03-12T03:06:17","modified_gmt":"2018-03-12T03:06:17","slug":"negotiable-instrument","status":"publish","type":"page","link":"https:\/\/reunitethestates.org\/?page_id=12012","title":{"rendered":"negotiable instrument – formal document signed by the maker or drawer; with a promise or order to pay, on demand or at a certain time, an amount of money, to order or to bearer"},"content":{"rendered":"

\u00a0 \u00a0 \u00a0This page is continued from Legal Instruments<\/a>:<\/span><\/strong><\/p>\n

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negotiable instrument<\/span>:<\/span><\/span><\/strong>
\n (18c)<\/span><\/span><\/p>\n

1. A written<\/span> instrument<\/a> that <\/span><\/span><\/strong><\/p>\n

(1) is signed by the<\/span> maker<\/a> or <\/span>drawer<\/a>,<\/span>
\n (2) includes an unconditional promise or order to pay a specified sum of money,<\/span>
\n (3) is payable on demand or at a definite time, and<\/span>
\n (4) is payable to order or to bearer. UCC \u00a7 3-104(a).\u00a0 *\u00a0 <\/span><\/span><\/strong><\/p>\n

Among the various types of negotiable instruments are<\/span> bills of exchange<\/a><\/span>, promissory notes, bank checks, certificates of <\/span><\/strong>deposit, and other negotiable securities. <\/strong>\u2014 aka<\/span> negotiable paper<\/strong><\/em><\/span>; negotiable note<\/strong><\/em><\/span>. [1]<\/span>
\n<\/span><\/p>\n

Literally, an<\/span> instrument<\/a> having the transferable quality known as negotiability.\u00a0 An<\/span> instrument<\/a>, constituting a valid contract, for the payment of money in a certain, definite sum, to order or bearer, on demand, at sight, or in a certain time, or on the happening of an event which must occur, and payable absolutely, not on a contingency.<\/span> 11 Am 12d B & N \u00a7 56<\/span>. <\/span><\/span><\/strong><\/p>\n

An instrument in writing signed by the<\/span> maker<\/a> or <\/span>drawer<\/a>; containing an unconditional promise or order to pay a sum certain in money; payable on demand, or at a fixed or determinable future time; payable to order or to bearer; and where addressed to a drawee, the latter is named or otherwise indicated with reasonable certainty.<\/span> Uniform Negotiable Instruments Law \u00a7 1<\/span>; Anno: 44 ALR2d 57, \u00a7 11<\/span>. <\/span><\/span><\/strong><\/p>\n

An instrument signed by the<\/span> maker<\/a> or <\/span>drawer<\/a>; containing an unconditional promise or order to pay a sum certain in money and no other promise, order, obligation, or power given by the<\/span> maker<\/a> or <\/span>drawer<\/a> except as authorized by statute; payable on demand or at a definite time; and payable to order or to bearer. UCC \u00a7 3-104(1). <\/span><\/span><\/strong><\/p>\n

A bill of exchange, draft, check, promissory note, certificate of deposit, bearer bond, or other instrument to which there is extended the quality of negotiability by the Uniform Commercial Code or other statute.<\/span> 11 Am J2d B & N \u00a7 6<\/span>.<\/span><\/strong> [2]<\/span><\/span><\/p>\n

\n

1. Under the Uniform Commercial Code, a signed writing that orders or promises payment of money if: it is unconditional, it is in a fixed amount, it is payable on demand to bearer or to order or at a definite time, and it \u201c<\/span>does not state any undertaking or instruction by the person promising or ordering payment to do any act in addition to the payment of money<\/span>.\u201d (EXAMPLES: a check; a money order; a certificate of deposit; a bond; a note, a bill of lading; a warehouse receipt.)\u00a0 Negotiable instruments are also referred to as commercial paper<\/span><\/em> or negotiable paper<\/span><\/em>.<\/span><\/strong> [3]<\/span><\/span><\/p>\n<\/div>\n

\u00a0\u00a0\u00a0\u00a0<\/span> Excerpt from Thomas E. Holland’s <\/span>The Elements of Jurisprudence<\/em><\/a> (13th ed. 1924):<\/span><\/strong><\/span><\/p>\n

\u00a0\u00a0\u00a0\u00a0 \u201c<\/span>What are called \u2018negotiable instruments,\u2019 or \u2018paper to bearer,\u2019 such as bills of exchange, or promissory notes, do really pass from hand to hand, either by delivery or indorsement, giving to each successive recipient a right against the debtor, to which no notice to the debtor is essential, and which, if the paper is held bona fide and for value, is unaffected by flaws in the title of intermediate assignors.<\/span>\u201d<\/span><\/strong> [4]<\/span><\/span><\/p>\n

\u00a0\u00a0<\/span>\u00a0\u00a0 Excerpt from James J. White & Robert S. Summers’<\/span> Uniform Commercial Code<\/a> <\/em>(4th ed. 1995):<\/span><\/strong><\/span><\/p>\n

\u00a0\u00a0\u00a0\u00a0 \u201c<\/span>One must first understand that a negotiable instrument is a peculiar animal and that many animals calling for the payment of money and others loosely called \u2018commercial paper\u2019 are not negotiable instruments and not subject to the rules of Article 3.<\/span>\u201d<\/span><\/strong> [5]<\/span><\/span><\/p>\n

Related Terms:<\/span><\/strong><\/p>\n

negotiable<\/a><\/span> – capable of being transferred by delivery or indorsement when the transferee<\/a> takes the instrument for value, in good faith, and without notice of conflicting title claims or defenses.\u00a0 The four methods of transfer include indorsement<\/a>, assignment<\/a>, delivery, and
\n<\/span><\/strong><\/span><\/p>\n

transfer<\/a><\/span> \u2013 negotiation of an instrument according to the forms of law: the four methods of transfer are by indorsement, by delivery, by assignment, and by operation of law.<\/span><\/strong><\/span><\/p>\n

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