Because negotiable instruments are more valuable than non-negotiable ones, it is important for buyers and sellers to be able to tell, easily and accurately, if an instrument is indeed negotiable. What six standards must an instrument meet in order for it to be negotiable?
In order for an instrument to be negotiable, it must meet the following six criteria:
The instrument must be in writing.
The instrument must be signed by the maker or drawer.
The instrument must contain an unconditional promise or order to pay.
The instrument must state a definite amount of money.
The instrument must be payable on demand or at a definite time.
The instrument must be payable to Order or to Bearer.
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