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Requirements ofNegotiabilityDrafting InstrumentsTo be negotiable, an instrument must satisfy specific criteria (seeFigure 23.4). It must:l Explain the elements of negotiable instruments.l Bear the signature of the maker or drawer.l Be an unconditional promise or order to pay.l Be made out for a fixed amount of money.l Be payable on demand or at a definite time.l Be payable to order or to bearer.Figure 23.4Definite Time Payable Order Unconditional Written Promise$ 3, 250.00 Newark, New Jersey, January 16, 20--Ninety days after date I promise to payTo the order ofPamela LemkowitzThree thousand two hundred fifty and 00/100------------------ DollarsPayable atSecond National BankValue received with interest at 8.5%No. 3260 Due April 16, 20--l How to state therequirements ofnegotiabilityl How to describe theimportance of dateson negotiableinstrumentsl How to identify thecontrolling wordson negotiableinstrumentsRecognizing thenegotiability andcontrolling words ofinstruments will helpyou make meaningfulbusiness and financialdecisions.Fixed AmountSignatureREQUIREMENTS OF NEGOTIABILITYThe requirements of negotiability are indicatedon this 90-day note. Would the instrument benegotiable if it were for pesos instead of dollars?l demand paperl definite-time paperl words of negotiabilityWritten InstrumentThe promise, or order, to pay must be in writing. It can be printed,typed, handwritten in pen or pencil, or expressed by using any othertangible form of writing. A negotiable instrument written in pencil is,however, an invitation for forgery. The person who drew the instrumentwould be responsible for any loss caused by the negligent drawing ofthe instrument.Chapter 23: Negotiable Instruments 511