Negotiable instrument

A legal right to payment or assets which the bearer can, without the consent of the issuer, transfer to a third party (a process known as “negotiating”). These days, negotiable instruments are more or less the same as transferable securities, but in the good old days banker’s drafts, cheques, bills of exchange, promissory notes and so on, which did not count as securities but were nonetheless negotiable.

See also

• promissory note for an amusing passage from Anthony Trollope’s The Way We Live Now.