What term describes a commercial paper made payable "to the order of" a named party?

The term that describes a commercial paper made payable "to the order of" a named party is known as Order paper. This designation means that the instrument is transferable and can be negotiated by endorsement. The named party can further endorse it to someone else, allowing the document to be passed along in a chain, which is essential in financial transactions.

In contrast, bearer paper, for instance, is payable to whoever holds the document and does not require endorsement. This type of paper is less secure since possession is the only requirement to claim the payment. Promissory notes represent a promise to pay a specific sum but do not inherently describe the mechanism of transfer. Draft paper refers more generally to a document that orders a payment rather than designating a specific named payee in the same way as Order paper does. Thus, Order paper is the correct and precise term for this type of commercial paper, emphasizing its negotiability and the requirement of endorsement for transfers.