What is a negotiable instrument?

A negotiable instrument is a document that represents a legally enforceable monetary obligation. It is a tool that facilitates the transfer of rights and obligations from one person to another. Common examples of negotiable instruments include checks, promissory notes, and bills of exchange. These instruments are considered transferable and can be used to make payments or secure debts. The key characteristic of negotiable instruments is their negotiability, which means they can be transferred to another party who then becomes the new holder and obtains all legal rights associated with the instrument.

This mind map was published on 16 January 2024 and has been viewed 92 times.