Negotiable Instruments

Negotiable instruments let value move safely by paper: a cheque, a bill of exchange or a promissory note can be transferred from person to person, and a good-faith holder can acquire a better title than the person who transferred it. This chapter explains the three instruments, negotiation, and dishonour. A worked example follows a cheque that bounces: the payee can demand payment, and dishonour carries civil and criminal consequences in defined circumstances.