NEGOTIABLE INSTRUMENT

Banking business largely revolves around Negotiable instrument. Although there is no definite definition of negotiable instrument has been given in the above said act yet as per section 13 of the act says that promissory notes, Bill of exchange, and cheques payable either to bearer or to order is are negotiable instruments. Following are the main characteristics of Negotiable Instrument.
1)Negotiable instruments are easily transferable. However, it is to be noted that transferability does not mean negotiability. There is difference between transferability and negotiability.
2The title of the negotiable instrument can be transferred by mere delivery of the instrument if it is bearer or by endorsement and delivery if it is an order one.
3)In above case it should be free from defects.
4)The instrument should contain a right of action itself. The possessor of it is deemed to be the true owner capable of enforcing any claim thereon.