Elements of a Negotiable Instrument

Mar 29th, 2015
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Elements of a Negotiable Instrument

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Elements of a Negotiable InstrumentNameClassDateProfessorElements of a Negotiable Instrument A negotiable instrument is a written promise where one part agrees to provide payment in the form of a security for the purchase of an item or service. According to the UCC the negotiable instrument refers to a written document where there is a promise to pay a fixed amount of money. In order for it to be considered a negotiable instrument is must be signed by the payee and dated to establish future payment. For example a check or a cashier's check would be a negotiable interest as well as a promissory note. When a note provides a promise of payment for the amount of $20,000 and guarantees a 7% interest it is considered a promissory note and therefore it becomes a negotiable instrument. The promissory note meets that a written promise because it provides a specific promise, is payable to a bearer, and a date and the individual buying the car from Bob has signed the agreement. The negotiable instrument does not refer to payment to be received at time of purchase but instead refers to a later date when payment will be paid (Kosar, 2005). Cash is nonnegotiable because the purchase is completed once the money is exchanged for the product or service. ReferencesKosar, W. (2005). Negotiable Instruments Law. Retrieved February 5, 2012 from http://www.centralbank.gov.af/pdf/NI%20LAW%20Handbook%20Eng.pdfNegotiable Instrument and

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