Drafts can be negotiated from party to party; however,a promissory note,if used as an extension of credit,cannot be freely negotiated.

Question

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A promissory note, if used as an extension of credit, carries a fixed obligation to be repaid to a specified creditor and cannot be freely negotiated between parties like a draft. It requires the consent of both the borrower and the original creditor to transfer or negotiate the note.

Drafts Can Be Negotiated from Party to Party; However,a Promissory