There is a lot of money that is exchanged while transacting in different businesses each year. There are different types of negotiable instruments that are used while transacting in different businesses. 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.
A valid negotiable instrument needs to be in writing. 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 person who has the negotiable instrument is known to be the owner of the property that is contained by the instrument. The person processing the negotiable instrument is considered to be the owner of the property in the instrument. From that, we can say that a negotiable instrument gives right to property and not the property only.
A valid negotiable instrument should have identification of the person or people to whom should receive the payment. Such people can either be living or artificial if they are 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. Negotiable instruments can be identified in different types which are by statute and by usage. The negotiable instruments by statute exist because of a certain 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. Some of the practices that were used in commerce in the past are still used in modern trade. Nowadays however, they are used a lot in banking as well as in 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.