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NEGOTIABLE INSTRUMENTS – A written contract for the payment of money which complies with
the requirements of Sec 1 of the Negotiable Instruments Law (NIL), which by its form and on its face,
is intended to hand as money, so as to give the holder in due course (HDC) the right to hold the
instrument free from personal defenses and available to prior parties (Jose R. Sundiang and Timoteo B.
Aquino, Reviewer on Commercial Law, 2006 ed.).


1. Must be in WRITING and signed by the maker or drawer – Signature is binding however
written or printed as long as it is intended to be the signature of the signer or made with
his authority
o Assumed or Trade name – NO person is liable on the NI whose signature does not appear
thereon unless otherwise provided. But one who signs in a trade or assumed name will be
liable to the same extent as if he signed his own name (Sec 18 NIL)
o Signature by agent – The signature of any party ma be made by a duly authorized agent.
No particular form is necessary
o If the signature placed on the NI is not clear so what capacity the person intended to sign,
he is deemed as an indorser (Sec 17.f NIL)

2. Must contain an UNCONDITIONAL promise or order to pay a sum certain in money –

There must be an express promise or order to pay a sum certain in money
o “Promise” need not be used; an equivalent expression is sufficient
o Order is a command or imperative direction. A mere request or authority to pay is not
equivalent to an order.
o There must be a clear demand upon the drawee to pay