What is a negotiable instrument?

A negotiable instrument is defined as a document that promises payment of a specified amount of money to the holder or bearer of the instrument. This means that it can be transferred from one party to another, allowing for the negotiation of rights to receive payment. Examples of negotiable instruments include checks, promissory notes, and bills of exchange.

The term 'negotiable' implies that the instrument is freely transferable, meaning it can be endorsed and passed along to different parties without the need for complex formalities. This characteristic makes it particularly useful in financial transactions where liquidity and transferability are essential. By being transferable, it allows the holder to receive funds quickly and facilitates transactions between multiple parties.

In contrast, the other options do not meet the definition of a negotiable instrument. Real estate contracts, rental agreements, and statements of property value function in different contexts and do not provide the same kind of promise of payment or transferability as a negotiable instrument does.