Negotiable instrument Meaning and Definition

Pronunciation

/nɛgətˈeɪbəl ɪnˈstrʊmənt/

Part of Speech

Noun

Definition

A written order or instrument that is intended to be transferred from one party to another, typically for the payment of a sum of money, and is payable to the bearer or to the order of a named person, without regard to the signature or other representations made by the person on whom it is drawn.

Examples

The check is a negotiable instrument, allowing me to deposit it directly into my bank account.
The cashier’s check is a negotiated instrument, confirming the payment has been made.
The negotiable instrument was endorsed by the payee, transferring ownership to the new holder.
The instrument must be properly endorsed to be considered a negotiable instrument.
Negotiable instruments are regulated by banking and financial institutions to ensure secure transactions.

Synonyms

Check
Bill
Instrument

Antonyms

Non-negotiable
Non-transferable

Etymology

The term “negotiable instrument” originates from the Latin words “negotium” meaning “trade” or “business” and “instrumentum” meaning “tool” or “device”.

Usage Notes

Negotiable instruments are commonly used in business and financial transactions. The proper endorsement and transfer of ownership is crucial to ensure that the instrument is valid and enforceable.

Cultural References

Negotiable instruments have been featured in various films and literature, such as in the classic novel “Oliver Twist” by Charles Dickens, where the protagonist, Oliver Twist, seeks to obtain a negotiable instrument to secure his family’s financial stability.

Idiomatic Expressions or Phrases

When you’re “in the money”, your negotiable instrument is a viable means of exchanging value.

Related Words or Phrases

Check, Bill, Instrument, Endorsement, Transfer of ownership

Collocations

Check and verification, Negotiating and settling, Endorsing and transferring

Frequency of Use

Negotiable instruments are frequently used in business and financial transactions, making them an essential tool for commerce and trade.

Common Misspellings

Negotiable instrament, Negitible instrument, Negociable instrument