Negotiable Instrument Essay

2600 Words May 11th, 2012 11 Pages
Assignment on Negotiable Instrument
Course Title: Legal Environment of International Business

Prepared by: Farha Fatema
Date of Submission: 28/04/2011

Executive Summary
Negotiable instruments are written orders or unconditional promises to pay a fixed sum of money on demand or at a certain time. Promissory notes, bills of exchange, checks, drafts, and certificates of deposit are all examples of negotiable instruments. Negotiable instruments may be transferred from one person to another, who is known as a holder in due course. Upon transfer, also called negotiation of the instrument, the holder in due course obtains full legal title to the instrument. Negotiable instruments may be
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Modeled after the Negotiable Instruments Law, Article 3 has been adopted as law by all 50 states and the District of Columbia. It spells out the basic requirements for valid negotiable instruments and covers such matters as the rights of the holder, types of endorsement, warranties given to subsequent holders, forgeries, dating, and alterations.

Negotiable instruments
We know that documents of a certain type, used in commercial Transaction and monetary dealings are called negotiable instrument.
“Negotiable “means transferable by delivery and “Instrument” means a written document by which a write is created in favor of some persons. Examples include checks, bill fix, and promissory notes.
Definition:
The terms negotiable instrument means “a document transferable by delivery”. So
A transferable, signed document that promises to pay the bearer a sum of money at a future date or on demand.
The negotiable instruments act is based on English law. It is more or less a coordination of the English common law rules on the subject.
EX: negotiable instrument noun bank check, bank note, bank paper, bill, bill of exchange, cashier's, check, commercial instrument, commercial paper, commercial transition, debenture, draft, negotiable paper, note, personal check, promissory note.
Thus a negotiable instrument is one in which, “the true owner could transfer, the contract or engagement contained

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