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Crossing: not negotiable


If a cheque is crossed 'not negotiable' the holder cannot give a better title than that which he possesses. This does not stop the holder from transferring the cheque to another party but that other party cannot get a better title than that possessed by the holder himself. The negotiability of the cheque has in fact ceased - it is no longer a negotiable instrument. As an example: A draws a cheque. If it is not crossed 'not negotiable' B may steal it and bank it or pass it on to C- A would have no redress. If it was crossed 'not negotiable' B having no title could not give ne to any third party and therefore A could recover the money. A cheque is the only type of bill of exchange which can be crossed not negotiable. An ordinary bill, if it is to be not negotiable, must state this on the face of the bill.

Reference: The Penguin Business Dictionary, 3rd edt.