Negotiable Instrument (Noun)
Meaning
An unconditional order or promise to pay an amount of money.
Classification
Nouns denoting communicative processes and contents.
Examples
- A check is a type of negotiable instrument that allows the holder to receive the specified amount of money at a bank.
- The company issued a promissory note, a negotiable instrument, promising to repay the loan with interest.
- A negotiable instrument enables the holder to demand payment from the issuer or drawer.
- The bank verified the negotiable instrument before honoring the payment to the payee.
- As a negotiable instrument, a bill of exchange can be freely transferred or assigned to a third party.