Legal Dictionary of Pakistan

negligence rule

Commercial law. The principle that if a party's negligence contributes to an unauthorized signing or a material alteration in a negotiable instrument, that party is estopped from raising this issue against later parties who transfer or pay the instrument in good faith. ( Examples of negligence include leaving blanks or spaces on the amount line of the instrument, erroneously mailing the instrument to a person with the same name as the payee, and failing to follow internal procedures designed to prevent forgeries.