Commercial Paper - Explained
What is Commercial Paper?
- Marketing, Advertising, Sales & PR
- Accounting, Taxation, and Reporting
- Professionalism & Career Development
-
Law, Transactions, & Risk Management
Government, Legal System, Administrative Law, & Constitutional Law Legal Disputes - Civil & Criminal Law Agency Law HR, Employment, Labor, & Discrimination Business Entities, Corporate Governance & Ownership Business Transactions, Antitrust, & Securities Law Real Estate, Personal, & Intellectual Property Commercial Law: Contract, Payments, Security Interests, & Bankruptcy Consumer Protection Insurance & Risk Management Immigration Law Environmental Protection Law Inheritance, Estates, and Trusts
- Business Management & Operations
- Economics, Finance, & Analytics
- Courses
What is Commercial Paper?
Commercial paper is a broad categorization of financial instruments (also referred to as an instrument) promising to pay or ordering payment to a person legally entitled to enforce the instrument. Because it has value for the individual in possession or holding the instrument, it is used as a substitute to money in commercial transactions.
Example: A check is commercial paper that orders a third party to pay money. A promissory note is another form of commercial paper that evidences a loan and outlines the duty of the maker of the note to make payment to the holder of the note.
Next Article: Types of Commercial Paper Back to: COMMERCIAL PAPER
Related Topics
- What is Commercial Paper?
- What are the common types of commercial paper?
- Negotiable Instrument
- Who is a Holder of a negotiable instrument?
- Commercial Paper Funding Program
Discussion Question
Why do you think it is necessary for commercial paper to entail an unconditional right to be paid? How is commercial paper different from a contract?