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Negotiable instruments serve two different functions in commercial transactions: a credit function and a payment function.
53. (1) A holder who derives his title through a holder in due course, and who is not himself a party to any fraud or illegality affecting the negotiable instrument, has all the rights therein of that holder in due course as regards the acceptor and all parties to the instrument prior to that holder.
Examples of negotiable instruments include bank checks, promissory notes, certificates of deposit, and bills of exchange.
A negotiable instrument is a signed document that promises a payment to a specified person or assignee. Negotiable instruments are transferable, which allows the recipient to take the funds as cash, then use them as preferred. Examples of negotiable instruments include checks, money orders, and promissory notes.
( ACT NO. XXVI OF 1881 ) 52. The indorser of a negotiable instrument may, by express words in the indorsement, exclude his own liability thereon, or make such liability or the right of the indorsee to receive the amount due thereon depend upon the happening of a specified event, although such event may never happen.