Defining a Negotiable Instrument

Question 1

What is a negotiable Instrument

Essay Rule Version

Answer 1

A signed writing, stating an unconditional promise or order to pay, a fixed amount of money, payable to bearer or order, on demand or at a definite time, without stating any other instructions or undertakings.

Question 2

Promise

Answer 2

Must be payable to order or bearer

Question 3

Money

Answer 3

Must be in government currency

Question 4

On demand or definite time

Answer 4

Payable on demand, or time readily ascertainable on face of instrument.

Question 5

No extraneous Circumstances

Answer 5

Maker or drawer should make no promise in the instrument, other then to pay money.

Question 6

Negotiation of order and bearer Paper

Answer 6

With bearer paper a negotiation takes place when a physical transfer occurs of the instrument. With order paper the negotiation takes place upon physical transfer on the instrument and endorsement of the payee .

Question 7

Blank & Special endorsements

Answer 7

Black endearment becomes bearer paper, special endearment becomes order paper.