An instrument can qualify as a negotiable instrument if includes a clause concerning an authorization to confess judgment or to realize on or dispose of collateral.

Question

Quizplus · Accepted Answer

A negotiable instrument must be unconditional, meaning that it cannot be subject to any conditions or contingencies. A clause that authorizes the holder to confess judgment or to realize on or dispose of collateral would make the instrument conditional, and therefore not negotiable.

An Instrument Can Qualify as a Negotiable Instrument If Includes