1. (Of a written instrument) capable of being transferred by delivery or indorsement when the transferee takes the instrument for value, in good faith, and without notice of conflicting title claims or defenses. [Cases: Bills and Notes 144. C.J.S. Bills and Notes; Letters of Credit§§ 127, 129–130, 143.]
2. (Of a deal, agreement, etc.) capable of being accomplished.
3. (Of a price or deal) subject to further bargaining and possible change. Cf. NONNEGOTIABLE; ASSIGNABLE.
“The term ‘negotiable,’ in its enlarged signification, is used to describe any written security which may be transferred by indorsement and delivery, or by delivery merely, so as to vest in the indorsee the legal title, and thus enable him to bring a suit thereon in his own name. But in a strictly commercial classification, and as the term is technically used, it applies only to those instruments which, like bills of exchange, not only carry the legal title with them by indorsement, or delivery, but carry as well, when transferred before maturity, the right of the transferee to demand the full amounts which their faces call for. ‘Assignable’ is the more appropriate term to describe bonds, and ordinary notes, or notes of hand as they are most commonly called; as ‘negotiable’ is the more fitting term to describe the peculiar instruments of commerce.” 1 John W. Daniel, A Treatise on the Law of Negotiable Instruments§ 2, at 3 (Thomas H. Calvert ed., 7th ed. 1933).
