Date of Award

Spring 1932

Document Type



Business, Accounting & Economics


DEFINITION. "An instrument is called negotiable when the legal title to the instrument itself, and the whole amount of money expressed upon its face, may be transferred from one to another by indorsement and delivered by the holder or by delivery only." Negotiable paper or instruments, are synonymous terms. At a very early day in the history of primitive peoples, the commerce was conducted exclusively by barter and exchange of commodities. A given number of cattle would be exchanged for a given number of horses, or some bushesl or measures of wheat for a certain quantity of some other commodity. But almost in the dawn of history the use and value of money for the facilitation of trade were recognized, and instead of barter and exchange, it became the common custom to sell the commodity for so many pieces of money.

DISTINCTIVE CHARACTERISTICS.- -Although negotiable instruments are contracts in a broad sense of the word, they posses two distinctive characteristics wherein they differ from ordinary contracts. These are negotiability and the presumption of consideration.