Asked by Maria del Mar Ribas on Apr 27, 2024
Verified
What are the conditions necessary for a person to be able to accept a negotiable instrument as a substitute for money?
Negotiable Instrument
A written document guaranteeing the payment of a specific amount of money, either on demand or at a set time, with the payee’s name on it.
- Acquire knowledge about the concept of negotiability and its criticality in trade activities.
- Gain insight into the prerequisites and exceptions for an instrument's qualification as negotiable.
Verified Answer
AW
Aidan WagnerApr 28, 2024
Final Answer :
In order to accept a negotiable instrument readily,a person must be able to take it free of many of the risks assumed by the assignee of a regular contract.Under the law of negotiable instruments,this is possible if two conditions are met: (1)the contract for the payment of money must meet the formal requirements to qualify as a negotiable instrument;and (2)the person who acquires the instrument must qualify as a holder in due course.
Learning Objectives
- Acquire knowledge about the concept of negotiability and its criticality in trade activities.
- Gain insight into the prerequisites and exceptions for an instrument's qualification as negotiable.