Negotiable Instrument

A transferable written document that signifies a promise to pay a fixed amount of money on a future date or on demand.

Additional Sources

Transferable document (e.g., a bank note, check, or draft) containing an unconditional promise or order to pay a specified amount to its holder upon demand or at a specified time. In the U.S., the Uniform Commercial Code governs negotiable instruments.

Duhaime Legal Dictionary

A document of an amount of money, or a title, which is readily transferable to another.

An unconditional promise to pay a certain amount of money, at a certain time or on demand, to the bearer of the instrument.

The Free (Legal) Dictionary

n. check, promissory note, bill of exchange, security, or any document representing money payable which can be transferred to another by handing it over (delivery) and/or endorsing it (signing one's name on the back either with no instructions or directing it to another such as "pay to the order of Pamela Townsend.")


A negotiable instrument is a specialized type of contract for the payment of money that is unconditional and capable of transfer by negotiation. As payment of money is promised later, the instrument itself can be used by the holder in due course frequently as money. Common examples include cheques, banknotes (paper money), and commercial paper. In the United States, the Article 3 of the Uniform Commercial Code covers the use of negotiable instruments except banknotes (money).