How did “negotiable” mean “a good or security whose ownership is easily transferable”?
I knew merely the first most popular meaning of negotiate. I never knew this second legal meaning
A document of an amount of money, or a title, which is readily transferable to another.
Difference between Transferability and Negotiability - SRD Law Notes
Negotiability also gives a right to the possessor of the property to transfer it to anyone but for consideration. The Negotiator is not required to establish his credentials. In negotiability, the property is accepted in good faith.
Where did this legal meaning hail from? Etymonline doesn't discuss it.
negotiate [16]
The etymological notion underlying negotiate is of ‘not being at leisure’, and hence of ‘being busy’. The word comes ultimately from Latin negōtium ‘business’, which was a compound formed from the negative particle neg and ōtium ‘leisure’ (source of English otiose [18]). From it was derived the verb negōtiārī ‘do business’, which passed into English as negotiate. There is some early evidence in the derivatives negotiation and negotiator that the original Latin sense of the word survived into English, but in the verb itself it had already developed via ‘transact business’ and ‘hold business discussions’ to ‘hold discussions’ generally.
Word Origins (2005 2e) by John Ayto. p 347 Right column.
1 answer
I'll address the etymology of "negotiable" (noun), which is a shorthand for "negotiable instrument of payment", where "negotiable" is a deverbal adjective from the transitive sense of the verb "negotiate". "Transitive" means that the verb requires an object, and that object is going to become called, in our case, the "negotiable".
Etymonline does discuss the relevant sense of the verb:
Transitive sense of "arrange for or procure by negotiation" is from 1610s.
However, the deverbal adjective is necessarily younger.
Ewart (in his article Negotiability and Estoppel, Law Quarterly Review, 1900) says "The truth is that 'negotiable' has an original and an acquired significance. Originally it meant transferable; but afterwards it was used to designate the effects of transfer, namely, that the transferee (1) took free from equities, and (2) could sue in his own name."
Negotiability (of payment instruments) as a business practice (i.e., the very concept whose naming we are discussing) developed during the 17th century, the first English statutes concerning negotiable instruments appear around 1700, and the term "negotiable" in the latter meaning mentioned by Ewart certainly become fully established and dominant in its modern meaning by the second half of the 18th century - it is how Lord Mansfield (the highly influential judge) uses it.
Most of this is presumably legal history of England much more than the result of any unique linguistic process within English, because the suffix "-able" was highly productive during those two centuries, as well as before and after. The English language was well ready by the time the merchants started to put their pressure on the legal system toward the convenience of transferable instruments of payment.
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