Negotiability and Transferability

Definition

Negotiability and Transferability. In the case of products, commodities, property, and many financial assets, which are transferable from party to party, the general rule of law is that the transfer or cannot transfer to the transferee title better than the transfer or possesses.

A negotiable instrument is an exception to this rule of law. The holder of a negotiable instrument, in the position of being a transferee, is not compromised by a fault in the title of the transferor or any other party.