9 Negotiability

B: NEGOTIABILITY

1: MEANING

9 Negotiability

Bills of exchange, cheques and promissory notes are negotiable instruments and as such their purpose is to record an agreement to pay money1. Their negotiability makes them acceptable to third parties. Negotiability means that a transferee who takes such an instrument in good faith and for value thereby acquires a good title notwithstanding any defect in title of a prior party. When an instrument is used to effect payment in an international sales transaction it is necessary to determine whether, according to its applicable law, the instrument is negotiable and whether that

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