Legal principle preventing an entity from putting forth a defense based on a mistake caused by that entity’s negligence. For example, if a negligent entity causes a negotiable instrument’s misuse, as in delivering it to a wrong person or leaving blank spaces in it, then that entity is estopped (refer to estoppel) from using the misuse against any subsequent holder who in good faith accepted or transferred the instrument.
Link to This DefinitionDid you find this definition of NEGLIGENCE RULE helpful? You can share it by copying the code below and adding it to your blog or web page.
Written and fact checked by The Law Dictionary