Three distinguishable features of a negotiable instrument

Question

What are the three distinguishable features of a negotiable instrument?

Answer 1

There are three distinguishable features of a negotiable instrument that are not common to the ordinary assignment of contractual rights, as discussed below. These are designed to facilitate the free transfer of negotiable instruments from party to party. Even if an instrument is not negotiable, in that it fails to meet one or more of the criteria, it still may be assignable as a contractual right as discussed under contract law.

1. Notice of the assignment need not be given to the original promisor.

2. Assignee can occasionally obtain a right to sue on instrument than its assignor (predecessor) had.

3. Holder can sue in its own name to any other party that is responsible on the instrument without joining any of remaining parties.