Instruments Term Paper:
A negotiable instrument is the document, which makes the payer pay the mentioned amount of money on the basis of the commercial and banking credit. Negotiable instruments are considered to be the instruments of crediting, because they play the function of money in the relation between the creditor and the debtor. Generally, there are several negotiable instruments which are used in the field of banking all over the world: promissory notes, cheques and banknotes. A promissory note is one of the most important negotiable instruments. The characteristic feature of the promissory note is that the money is paid obligatory on demand. The owner of a promissory note can ask the debtor to pay money and the latter is obliged to do it. Moreover, a promissory note can be given to someone else (another person gains the right to receive the money mentioned in the promissory note) or be used as a deposit in a bank.
A cheque is a direct order to the bank to pay the mentioned sum of money to the owner of the cheque. The circulation and use of cheques is strictly controlled in the majority of the countries in order to protect people from cheating and unpredictable incidents with cheques. Cheques are very convenient in the international transactions, when it is difficult or impossible to pay with the banknotes. A banknote is the result of the evolution of a promissory note. Banknotes are produced in the central bank of the country and they are considered to be the common and the most appropriate way of payment.
Negotiable instruments are the part of economics and human life, because we meet and use these instruments every day. In order to understand the way of their work and prepare a negotiable instruments term paper one should devote much time and efforts. Writing the term paper a student will need to explain the meaning of the term a ‘negotiable instrument’ and define its value for economics. Moreover, it is important to mention all the key types of negotiable instruments, describe them and explain their advantages and disadvantages. One should provide the reader with the direct examples where the negotiable instruments can be used and why.
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