negligence rule

Popular Terms
Legal principle that prevents the use of a negligently-caused mistake as a legal defense. Thus, if a negotiable instrument is misused due to a party's negligence (such as delivering it to a wrong person or leaving blank spaces in it) then that party is estopped (see estoppel) from asserting the issue of misuse against any subsequent holder in due course who accepted or transferred the instrument in good faith.


Email Print Embed