Two Distinctive Features of Negotiable Instruments

The two distinctive features of negotiable instruments are negotiability and accumulation of secondary contracts.

Negotiability. It is that attribute or property whereby a bill or note or check may pass from hand to hand similar to money, so as to give the holder in due course the right to hold the instrument and to collect the sum payable for himself free from defenses.

Accumulation of Secondary Contracts. Secondary contracts are picked up with Negotiable Instruments as they are negotiated from one person to another; or in the course of negotiation of negotiable instruments, a series of juridical ties between the parties thereto arise either by law or by privity. The indorsers become secondarily liable to the holder.