negotiable instrument

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Negotiable instrument

An unconditional order or promise to pay some amount of money, easily transferable from one party to another.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.


A security that may be bought or sold. Generally, a negotiable security is traded on the secondary market, but the initial sale takes place on the primary market. Negotiable securities may be low-risk, such a Treasury bonds, or high-risk, such as stocks. They are also known as marketable securities. See also: Nonmarketable security.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

negotiable instrument

A document signed by the maker or drawer,containing an unconditional promise to pay a certain sum of money on demand or at a definite time to the bearer or to order but without any other promise,order,obligation,or power.(See the Uniform Commercial Code,Article 3.)

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
References in periodicals archive ?
If the purchaser of a negotiable instrument is a holder in due course, the purchaser may not be subject to many of the defenses available to creditors under Article 9 of the UCC.
A construction of the code that recognizes commercial certainty can be accomplished by reference to some authority outside the writing itself also serves the purpose of the law of negotiable instruments, which is to make the instrument the functional equivalent of money.
Reification turns negotiable instruments into liquid assets by enabling some level of freedom from claims and defenses for all holders (not just those in due course), and it encourages borrowing by eliminating the risk of multiple satisfactions.
When a transfer of a negotiable instrument is made to someone who qualifies as a holder in due course, all personal defenses against the holder in due course are stopped.
(25) A new provision within section 3-307 of the revised UCC consolidated these various sections and clarified that a taker's notice of a fiduciary's breach of duty, concerning the fiduciary's transfer of a negotiable instrument to the taker, vitiates the defendant-taker's status as a holder in due course.
First, there was a direct physical loss of a check or negotiable instrument due to theft by deception.
is the only software solution provider for transferable electronic negotiable instruments, securities and source records which enable enterprises to execute secure, online business transactions in which legally enforceable electronic documents completely replace paper as the essential high value assets or source records.
The Eighth Circuit disagreed and held that the doctrine of constructive receipt as developed in the Code takes precedence over the law of negotiable instruments. The company that issued the check was not insolvent and did not place any substantial restrictions on the check.
While the Negotiable Instruments Law constitutes a comprehensive financial statute,(13) it is perhaps more significant for what it does not address than for what it does.
The company's licensed business includes Discounting/Purchasing of Negotiable Instruments, Securities, Participation Term Certificates, Term Finance Certificates and Investment Certificates issued by DFI's and banks and bills receivable for services rendered.
Outsider fraud now accounts for more than 60 percent of all fraud against financial institutions.(1) The most prevalent problem in the industry, by far, centers on check fraud, but also involves other counterfeit negotiable instruments, such as traveler's checks, credit cards, certified bank checks, money orders, and currency.
The most problematic aspect of the Freddie Mac insurance requirements is the new stipulation that policies provide coverage for notes as "negotiable instruments." Freddie Mac will now explicitly require that all notes be insured under both a financial institution bond and an errors and omissions policy as "negotiable instruments" to assure that notes are covered with respect to the value of the underlying obligation in the event of a total loss.