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Simple English definitions for legal terms
order instrument
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A quick definition of order instrument:
An order instrument is a written or printed document that can be used to evidence a debt or payment. It can be negotiable, meaning it can be transferred to another person, or non-negotiable, meaning it can only be paid to a specific person. Examples of order instruments include checks, promissory notes, and bills of exchange.
A more thorough explanation:
An order instrument is a written or printed document that can be negotiated or transferred to another person. It can be a negotiable document or instrument that represents a debt, such as commercial documents or negotiable instruments.
Examples of order instruments include:
- Bearer paper: An instrument that is payable to the person who holds it, rather than to a specific person. It can be negotiated by simply delivering the instrument to a transferee.
- Order paper: An instrument that is payable to a specific payee or to any person that the payee designates.
- Commercial paper: An instrument, other than cash, for the payment of money. It can exist in the form of a draft or a note and is governed by Article 3 of the UCC.
These examples illustrate the definition of order instruments because they are all written or printed documents that can be transferred or negotiated to another person. They represent a debt or payment of money and can be used in commercial transactions.