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Lesson 10, Topic 1
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Negotiable Instrument (Definition, Types, Characteristics)

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A negotiable instrument is a document evidencing an obligation which is transferable by mere delivery or by delivery and endorsement. Such delivery, operating to transfer all legal rights to the obligation evidenced, free from defects in the transferor’s title.

Characteristics of Negotiable Instrument

  1. The title passes by delivery
  2. The holder can sue in his name
  3. No notice is necessary to the debtor or other oblige
  4. The instrument must be recognized as a negotiable instrument by law

Types of Negotiable Instrument

  1. Bills of exchange
  2. Banknotes
  3. Cheques
  4. Promissory notes
  5. Dividend warrant
  6. Share warrant
  7. Bearer debenture
  8. Bearer Bond
  9. Treasury bills


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