Why Is Cheque Called Negotiable Instrument?


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Steven Vakula answered
Because it is an instrument which, in lieu of cash, can be tendered as a cash document for a transaction. It represent an individuals access to funds held on account with a financial institution. When a check is drawn by the drafter the individual which received the document can tender the instrument to his own or the drafters financial organization and will be exchanged for cash held in the account on which it was drafted. If there are not sufficient funds, the account has been closed or other various reasons the check can be returned as not sufficient funds (NSF) or other similar actions that would deem the check not valid for redemption.

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