Some Explanation about What a Negotiable Instrument is and some of the Different Types Available
Each year, there are a lot of dollars that are exchanged while transacting in different ways. While the business transactions are being made, there are various types of negotiable instruments that are used. A negotiable instrument is a written document that a certain person specified on it who is to be paid a certain amount of money that has been stated there at a date indicated or when he or she demands. Negotiable instruments happen to be of great importance in business transactions because they make things easier. You can check on some characteristics on a negotiable instrument for you to know whether it is valid or not.
One of the characteristics of a valid negotiable instrument is that it should be in written form. The writing may be in different forms such as handwritten, being typed and printed or being engraved. It should also be possible for a valid negotiable instrument to be transferable whereby it should be signed by the holder before it has been delivered to the transferee. The individual with the negotiable instrument is the owner of the property which is in the instrument. The person processing a negotiable instrument is presumed to be the owner of the property contained on the instrument. From that, we can say that a negotiable instrument gives right to property and not the property only.
A genuine negotiable instrument should identify the individual or persons who are expected to get paid. The people can either be alive or artificial in cases of corporate bodies. As seen in some of the latest supreme court judgment notices, it is possible for a transferee of a negotiable instrument to take some legal action using their name. One can be able to transfer a negotiable instrument as many times as he or she pleases as long as its maturity date has not reached. The two ways in which you can use to identify negotiable instruments are either by statute or by usage. The negotiable instruments by statute become in existence due to a specific statute.
Included in the negotiable notes are promissory notes, checks and bills of exchange. The negotiable instruments that happened from custom and usage get their origin from history. Many of the practices which were used in the past are still common in today’s trade. However, nowadays they have become of great benefit in banking today and some other business transactions. Some of the mostly used negotiable instruments by usage include warrants, bearer debentures, railway receipts, circular notes and delivery orders. Different business transactions generate a lot of money and it is important to have a way of facilitating the transactions easily.
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