Negotiable Instrument
A negotiable instrument is a written unconditional promise or order to pay a certain amount of money at a definite time or on demand. A promissory note is a negotiable instrument. It is written promise or order to pay money (ie. a California home loan). The most common type of negotiable instrument is an ordinary bank check. A check is an order to the bank to pay money to the person named. A promissory note for a California home loan is the same thing. It can transferred by endorsement, just like a check. If correctly prepared, it is considered the same as cash.
In order to be considered a negotiable instrument, however, the document much be considered with statutory definition and all of the following must be present.
A Negotiable Instrument Must Be:
· Signed by the maker or drawer
· An unconditional promise or order to pay a certain amount in money
· Payable on demand or at a definite time
payable to order or bearer
Kevin O’Connor
Mortgage Consultant
www.koloans.com
800.550.5538
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