Dictionary of Legal Terms
In commercial law, a document is a negotiable instrument if it: 1) is signed by the maker or person on whose account it is drawn; 2) contains an unconditional promise or order to pay a specific sum of money; 3) is payable either on demand or at a definite time; and 4) is payable either to the order of a particular person or to the bearer. Common types of negotiable instruments are checks, drafts, bills of exchange, certificates of deposit, and promissory notes. A negotiable instrument (also called commercial paper) is a substitute for cash, and is used in commerce because it can be more convenient and secure than cash. See promissory note.
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This dictionary was developed by the Ohio State Bar Association with funding from the Ohio State Bar Foundation. The information contained in this dictionary is general and should not be applied to specific legal problems without first consulting your own attorney.
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