Requirements for Negotiability

Question 1

What are the properties that make a document a negotiable instrument?

Answer 1

Acronym: SUFT
Signature
Unconditionality
Fixed Amount
Time of Payment

Question 2

Explain the Signature Property.

Answer 2

Every negotiable instrument must contain the signature of the drawer i.e. the signature of the person issuing the negotiable instrument.

Question 3

Explain the Unconditionality Property.

Answer 3

Every negotiable instrument must be unconditional, meaning they should not require the fulfillment of a condition for them to be cashed.

Question 4

Explain the Fixed Amount Property.

Answer 4

Every negotiable instrument must contain a fixed specified amount on it to be paid or cashed by the payee, this amount cannot be debatable.

Question 5

Explain the Time of Payment Property.

Answer 5

Every negotiable instrument must contain a specific date for the fixed amount present on it to be cashed by or paid to the payee. this property can only be ignored if the fixed amount is to be paid on demand.