1 / 9

Understanding Negotiable Instruments: Definition, Types, and Examples

Negotiable instruments are written orders or promises to pay a specified sum to designated parties or holders, making them transferable. Common examples include checks, drafts, bills of exchange, promissory notes, and even winning lottery tickets. Checks serve as the most prevalent type, offering convenience, safety, and transaction records. Drafts function as three-party instruments directing payments, while bills of exchange facilitate international transactions. Promissory notes are commitments to pay a fixed amount at a future date. Understand their significance in financial transactions today.

quintint
Télécharger la présentation

Understanding Negotiable Instruments: Definition, Types, and Examples

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Negotiable Instruments Created By: Laura Kinchen

  2. What is a negotiable instrument? • A written order or promise to pay a sum of money, either to a specified party or to the person who holds it. • Negotiable means transferable

  3. Negotiable Instrument • A check, like money, is a medium of exchange. • The negotiation that goes on refers to the transfer of the instrument from one party to another

  4. Examples of Negotiable Instruments • Checks • Drafts • Bills of exchange • Some types of promissory notes • Winning Lottery Tickets, Certificates of Deposit, Bonds, Treasury bills

  5. Checks • Most common form of negotiable instrument • Offer: • Convenience for writer and recipient • Relatively high degree of safety • Record of transaction

  6. Drafts • Three-party instrument like a check, but there are other forms • An order signed by one party (payer/drawer) that is addressed to another party (drawee) directing the drawee to pay to someone (payee) the amount indicated on the draft

  7. Drafts • Most drafts are used for the purchase of goods and services when the transaction goes beyond the bounds of the U.S. banking law

  8. Bills of Exchange • Negotiable and unconditional written order, such as a check, draft or trade agreement, addressed by one party to another • Common form of internationally negotiable instruments

  9. Promissory Notes • Written promise to pay at a fixed or determinable future time a sum of money to a specified individual

More Related