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Learn about the requirements for a valid negotiation, a transfer from a nonissuer by which someone becomes an instrument’s holder.


Article 3 governs negotiable instruments. A key characteristic of such instruments is the ease with which they can be transferred. Generally speaking, after a negotiable instrument has first been issued, it can be transferred to a party other than the original payee without much fuss.  

Under Article 3, this transfer is referred to as negotiation.

I. Negotiation

Article 3 defines negotiation as the voluntary or involuntary transfer of possession of a negotiable instrument by someone other...