What must be true of the amount stated in a negotiable instrument?

In a negotiable instrument, it is essential that the amount stated is a fixed amount of money. This requirement ensures clarity and certainty regarding the value to be paid when the instrument is presented for payment. A fixed amount allows all parties involved to understand exactly what monetary value is to be transferred, eliminating ambiguity and potential disputes.

Negotiable instruments, like checks or promissory notes, function based on the principle that they can be easily transferred from one party to another, and having a specific dollar amount is a critical aspect of this process. If the amount were to fluctuate or be based on estimates, it would undermine the reliability and utility of the instrument in commercial transactions. Having a fixed sum ensures that the terms of the agreement are clear and enforceable, maintaining the integrity of financial dealings.