Negotiable instrument

A negotiable instrument is a document guaranteeing the payment of a specific amount of money, either on demand, or at a set time, whose payer is usually named on the document. More specifically, it is a document contemplated by or consisting of a contract, which promises the payment of money without condition, which may be paid either on demand or at a future date. The term has different meanings depending on the use of the term as it is used in the application of different laws, and depending in which country and context it is used. The word "negotiable" refers to transferable and "instrument" refers to a document giving legal effect by the virtue of the law. William Searle Holdsworth defines the concept of negotiability as follows: Negotiable instruments are transferable under the following circumstances: they are transferable by delivery where they are made payable to the bearer, they are transferable by delivery and endorsement where they are made payable to order. Consideration is presumed. The transferee acquires a good title, even though the transferor had a defective or no title. In the Commonwealth of Nations almost all jurisdictions have codified the law relating to negotiable instruments in a Bills of Exchange Act, e.g. Bills of Exchange Act 1882 in the UK, Bills of Exchange Act 1890 in Canada, Bills of Exchange Act 1908 in New Zealand, Bills of Exchange Act 1909 in Australia, the Negotiable Instruments Act, 1881 in India and the Bills of Exchange Act 1914 in Mauritius. Additionally most Commonwealth jurisdictions have separate Cheques Acts providing for additional protections for bankers collecting unendorsed or irregularly endorsed cheques, providing that cheques that are crossed and marked 'not negotiable' or similar are not transferable, and providing for electronic presentation of cheques in inter-bank cheque clearing systems. In India, during the Mauryan period in the 3rd century BCE, an instrument called adesha was in use, which was an order on a banker desiring him to pay the money of the note to a third person, which corresponds to the definition of a bill of exchange as we understand it today.