Explain the characteristics of a negotiable instrument.
Answers
Answer:
A negotiable instrument is a piece of paper that guarantees the payment of a certain sum of money, either immediately upon demand or at a predetermined period, and whose payer is typically identified.
Explanation:
The entity providing the negotiable instrument makes no additional promises in these documents. Furthermore, the bearer cannot be given any further instructions or requirements in order for them to obtain the money specified on the negotiable instrument. An instrument must be marked or signed by the maker—the person providing the draft—for it to be deemed negotiable. The drawer of monies is the name given to this thing or person.
Characteristics of a negotiable instrument are:
Writing is required.
It must bear the maker's or drawer's signature.
It must be an unequivocal pledge or demand for payment.
It must be for a certain sum of money.
It must be payable immediately or at a specific day and time.
Bank checks, promissory notes, certificates of deposit, and bills of exchange are a few examples of negotiable instruments.
#SPJ3
Answer:
A written document known as a negotiable instrument grants the owner of the document the right to demand a specific sum of money. The two methods of simple delivery and endorsement allow for the transfer of this instrument from one person to another.
Explanation:
The following are some traits of negotiable.
•Instruments:The capacity to move an instrument from one person to another without any formalities is referred to as transferability. Only if it is payable to the bearer must it be delivered. If it is payable on order, it must also be endorsed.
•Holder is free from defect: If there are any misunderstandings or errors, the person whose name is on the bill is free from such issues and his or her rights are upheld.
•The transferee has the legal right to file a lawsuit if the document in his name is dishonoured. Any item that is negotiable is regarded as debt.
The ability to be transferred, the holder's defect-free status, and the transferee right to bring legal action are the characteristics of negotiable instruments.
#SPJ2