Advanced English Dialogue for Business – Negotiable instruments

Listen to a Business English Dialogue About Negotiable instruments

Clarence: Hi Elena, do you know about negotiable instruments in business and finance?

Elena: Yes, I think they’re documents that represent a promise to pay a specific amount of money to the holder, like checks and promissory notes.

Clarence: That’s right. Negotiable instruments are often used in commercial transactions to facilitate payments and transfers of funds.

Elena: Can you explain how negotiable instruments are transferred from one party to another?

Clarence: Sure, negotiable instruments can be transferred through endorsement, where the holder signs the back of the instrument, making it payable to another party.

Elena: Are there different types of negotiable instruments?

Clarence: Yes, common types include checks, promissory notes, bills of exchange, and certificates of deposit.

Elena: How do negotiable instruments benefit businesses?

Clarence: Negotiable instruments provide businesses with a convenient and secure way to make payments, manage cash flow, and extend credit to customers.

Elena: Can you give an example of how negotiable instruments are used in everyday business transactions?

Clarence: Sure, for example, when a customer writes a check to pay for goods or services, the check becomes a negotiable instrument that can be deposited into the seller’s bank account.

Elena: What happens if a negotiable instrument is lost or stolen?

Clarence: If a negotiable instrument is lost or stolen, the rightful owner should notify their bank or the issuer immediately to prevent unauthorized use and take appropriate action to recover the funds.

Elena: How do negotiable instruments differ from non-negotiable instruments?

Clarence: Negotiable instruments can be transferred from one party to another, while non-negotiable instruments are typically used for informational or record-keeping purposes and cannot be transferred.

Elena: Thanks for explaining, Clarence. Negotiable instruments seem like an important tool for businesses to manage financial transactions.

Clarence: Absolutely, Elena. They provide businesses with flexibility and efficiency in conducting transactions, which is essential for smooth operations and financial management.