An instrument that does not meet the formal requirements for negotiability will be treated as a simple contract rather than a negotiable instrument.

Question

Quizplus · Accepted Answer

A negotiable instrument must meet some formal requirements, such as being in writing, signed by the maker or drawer, containing an unconditional promise or order to pay a specified amount of money, and payable on demand or at a definite time. If an instrument does not meet these requirements, it cannot be considered negotiable and will be treated as a simple contract.

An Instrument That Does Not Meet the Formal Requirements for Negotiability