Function and importance of Negotiable Instruments.

1) As a substitute for money (eliminating the risk of dealing in cash)

2) As a medium of exchange for most commercial transactions (thus increasing the purchasing
medium in circulation, doing away the active handling of money, inconvenience and risk)
3) As a medium of credit transactions (A man does not always have property or valuable rights
which he can turn into cash at any moment)
4) As a means, in the case of check, of making immediate payment
Characteristics or features of negotiable instruments
1) Negotiability
2) Accumulation of secondary contracts as they are transferred from one person to another
Forms of negotiable instruments
1) Common forms Promissory Notes and Bill of Exchange and Back Check
Promissory Notes or those in which the issuer has promised to pay; and
Bills of Exchanges or those in which the issuer has ordered a third person to pay
2) Special Types Certificate of deposites, bank notes, due bills, bonds, drafts, trade acceptance
and bankers acceptance.