According to business law, negotiability has been referred to a document either a cheque, a bill of exchange, a promissory note or a draft that can be transferred from one person to another. For a document to be under the category of negotiability, it should possess the following characteristics; it should be written, it should be signed by the drawer or the maker, it should be unconditional order or promise to make the payment, it should have a fixed amount of money, the terms of payment should be on demand and it must be payable to the order (Goel,2016) .
Below is an instrument used for payment, we are going to evaluate the instrument and determine the type of instrument it is. The instrument is;“On a piece of paper, Joelle writes, “I promise to pay Rio $1000 on demand.” Joelle signs the note.”
Delegate your assignment to our experts and they will do the rest.
Taking a look at the above characteristic, it is clear that the instrument used by Joelle as a promise to pay Rio fall under negotiability. It is a promissory note that states the amount of money to be paid and on demand. The instrument is in written form and Joelle signed the note (Mann & Roberts, 2015) . The instrument is negotiable because it allows for transferability from one person to the other for delivery purposes. Joelle can transfer the instrument to Rio and ensure to pay the amount of money as noted down. This allows for Rio to own the instrument until Joelle has paid off the fixed amount of money.
The above instrument is a negotiable instrument because it has mentioned both the payee and the receiver of the money; the payee has signed and has stated the fixed amount of money to pay off. In any business, a document that bears the names of two people transacting money and the signature of the person paying the money; the instrument is negotiable because there is a transfer of ownership (Palliam, 2018) .
Reference
Mann, R. A., & Roberts, B. S. (2015). Business law and the regulation of business . Nelson Education.
Goel, S. (2016). The Negotiable Instruments Act, 1881: Critical Analysis.
Palliam, R. (2018). Legal and Ethical Issues In Business.
