A negotiable instrument is a document guaranteeing the payment of a specific amount of money, either on demand, or at a set time. Negotiable instruments are often defined in legislation. For example, according to the Section 13 of the Negotiable Instruments Act, 1881 in India, a negotiable instrument is a promissory note, bill of exchange or cheque payable either to order or to bearer. Cheque also includes demand draft .
More precisely, it is a document contemplated by a contract, which (1) warrants the payment of money, the promise of or order for conveyance of which is unconditional; (2) specifies or describes the payee, who is designated on and memorialized by the instrument; and (3) is capable of change through transfer by valid negotiation of the instrument.
Since a negotiable instrument is a promise of a payment of money, the instrument itself can be used by the holder in due course as a store of value; although instruments can be transferred for amounts in contractual exchange that are less than the instrument’s face value (known as “discounting”). Under United States law, Article 3 of the Uniform Commercial Code as enacted in applicable state law governs the use of negotiable instruments, except banknotes (“Federal Reserve Notes”, a.k.a. "paper dollars").
Read more about Negotiable Instrument: Negotiable Instruments Distinguished From Other Types of Contracts, History, In The Commonwealth, In The United States
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“I have an intense personal interest in making the use of American capital in the development of China an instrument for the promotion of the welfare of China, and an increase in her material prosperity without entanglements or creating embarrassment affecting the growth of her independent political power, and the preservation of her territorial integrity.”
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