A negotiable instrument is considered canceled if it is destroyed or mutilated by accident or by an unauthorized third party.

Question

Quizplus · Accepted Answer

A negotiable instrument is not considered canceled merely because it is destroyed or mutilated. It must be intentionally canceled by the holder or through a legal process to be considered as such. Accidental destruction or mutilation does not automatically cancel the instrument's negotiability or its underlying obligations.

A Negotiable Instrument Is Considered Canceled If It Is Destroyed