People are living in a society in which they are interdependent. The people interact with each other in furtherance of their objectives. The actions of people in such a process affect other people. Hence they must act so that their actions do not harm other people or even the environment. They must use their morality in deciding what is right and what is wrong. In philosophy, ethics is the study of such moral principles for deciding right and wrong. Alternatively, ethics are the moral principles themselves. Negotiable instruments provide an easy-to-use medium for the exchange of money. In the early times, transactions were taken place through barter. Goods were exchanged for goods, and it was soon realized that barter is not a feasible exchange system. Then the money was invented as everything could be measured in terms of money, and all transactions can occur with money as a medium of exchange. There are also some issues in the transaction of money. Large sums of money especially are difficult to carry and exchange. Negotiable instruments are used to make it more convenient and feasible for the exchange of money. However, as it is easy to use these instruments to transfer money, it is easy to misuse them. Hence negotiable instruments must be handled and used ethically so that no harm or loss is caused to anyone.
Ethics is the set of moral principles to determine right and wrong. Ethics is originated from the Greek word ‘ethos’, which may mean custom, habit, or character. Ethics may form an important tool for improving the morality of society. By practicing ethics, people may develop the habit of taking the morally right decision and eventually inculcating it into their character. Often, decisions relating to morality are subjective and confusing. Still, with the principles of ethics, such decisions can be easily taken as they provide a framework of rules to follow in such situations. Ethics is mostly concern about someone or something other than the self and its interest. Ethics are applied when interacting with other beings or things by considering their interests and self-interest.
A negotiable instrument is a legal document that promises to pay the bearer the sum specified on the negotiable instrument on a future date or on-demand. Here the bearer is the person entitled to receive the payment. It can be understood as a contract or promise to pay the specified amount to the bearer or payee. For example, personal checks, traveler’s checks, promissory notes, money orders, etc., are negotiable instruments. Negotiable instruments have a legal tender and provide a convenient medium of exchange for money.
In the U.S., Articles 3 and 4 of the Uniform Commercial Code (UCC) regulate the issuance and transfer of negotiable instruments. The UCC states that a negotiable instrument means an unconditional promise or order to pay a fixed amount of money, with or without interest or other charges described in the promise or order and states the requirements for a negotiable instrument. For a written document to be a negotiable instrument, the following are the requirements:
The promise must be unconditional.
There must be a fixed sum of money.
The payment must be made on a future date or on-demand by the payee.
The instrument must only contain the promise of payment by the payor and no other promise.
