Negotiability means that a person who takes an instrument in good faith will acquire all the rights to it in spite of any defect in title.

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Negotiability is a key characteristic of certain types of commercial paper, such as checks, drafts, promissory notes, and certificates of deposit. It means that a person who takes the instrument in good faith, for value, and without notice of any defects, such as forgery or lack of legal authority, will acquire all the rights to it, even if the transferor had no right to transfer it or had previously violated some agreement or rule. This principle facilitates the free flow and transfer of money and credit, and protects innocent purchasers from fraud or disputes between prior parties. However, negotiability is subject to some limitations and exceptions, and may vary according to the applicable law or custom.

Negotiability Means That a Person Who Takes an Instrument in Good