Beruflich Dokumente
Kultur Dokumente
1881
Types Of Negotiable
Instruments
1. Promissory Note
An instrument in writing containing
unconditional undertaking
Signed by the maker
To pay a definite sum to or to the order of
certain person or bearer
2. Bill of Exchange
An instrumental writing
Contains unconditional order
Signed by the maker
Directing a certain person to pay
Certain sum of money
Only to or the order of certain person or to the
bearer
3. Cheque
A bill of a change drawn on a specified
banker
Expressed to be payable on demand
Includes electronic image of a truncated
cheque and cheque in an electronic form
Characteristics of a Negotiable
Instrument
Freely transferable either by delivery or by
indorsement and delivery.
Title of the holder in due course free from
all defects
The holder in due course can sue in his own
name for recovery of the amount. No notice
of transfer required
Capacity of Parties
Minor may draw, indorse, deliver and
negotiate so as to bind all parties except
himself, i.e., he may operate as a channel to
convey title and liability but not to originate
it
Persons of unsound mind: bills and notes
drawn or made are void against
Corporation: a trading has implied power
and a non trading company must have
express power
Parties to Negotiable
Instruments
Promissory Note
Maker; Payee; Holder; Indorsee; Indorser
Bill of Exchange
Drawer; Drawee; Acceptor; Payee; Holder;
Indorser; Indorsee; Drawee in case of need;
Acceptor for honour
Cheque
Drawer; Drawee; Payee; Holder; Indorser;
Indorsee.
NEGOTIATION
When a negotiable instrument is transferred
to any person, the instrument is said to be
negotiated [sec 14].
Negotiation maybe by delivery or
indorsement and delivery.
TYPES OF INDORSEMENT
Blank or general indorsement.
Full or special indorsement.
Restrictive indorsement.
Partial indorsement.
Conditional or qualified indorsement.
Negotiation back.
PRESENTMENT FOR
ACCEPTANCE.
Only bill of exchange needs to presented for
acceptance.
A bill payable on demand or at site or on a
fixed date need not be presented for
acceptance unless otherwise agreed.
An acceptance maybe general or qualified.
DISHONOUR
A bill may be dishonoured by non-acceptance or
non payment
A promissory note or cheque can be dishonoured
only by non payment
Notice of dishonour must be given to all parties by
the holder
Notice not necessary in certain circumstances like
waiver,drawer countermanding payment,party not
found,non negotiable promissory note etc
DISCHARGE OF AN
INSTRUMENT
o
o
o
o
o
DISCHARGE OF PARTY OR
PARTIES
o
o
o
o
o
o
o
Payment in due course of crossed cheque:When the drawee banker pays it in due course it
is presumed that he has made payment to true
owner of the cheque even though the amount
may not reach the true owner.
Thank You