What is a characteristic of a negotiable instrument?

A characteristic of a negotiable instrument is that it must be transferable to others without restrictions. This quality is essential because it allows the instrument to be easily bought, sold, or otherwise transferred, facilitating trade and commerce. For an instrument to be negotiable, it should be able to pass from one person to another, often by mere endorsement or delivery, ensuring liquidity and flexibility in financial transactions.

The aspect of transferability is significant because negotiable instruments like checks or promissory notes enable holders to pass on their rights to payment easily. This feature supports the broader economy by making it simpler for individuals and businesses to settle debts and engage in commercial activities.

Other options, such as being signed only by the payee or being payable only at a specific time, do not align with the fundamental nature of negotiable instruments, which can be executed in various ways and may not always be time-specific. Moreover, containing a variable promise to pay would make the instrument less definitive and could compromise its negotiability, as certainty is a crucial factor for negotiable instruments.