BUSINESS LAW (B.COM)
PART �(B)
(B). Negotiable Instruments Act 1881
WHAT IS NEGOTIABLE INSTRUMENTS
we will define the negotiable instruments.
"A negotiable instrument means a promissory note, bill or exchange or cheque payable either to order or to bearer."
Section 13(1) of Negotiable Instruments Act 1881
"A negotiable instrument means a promissory note, bill or exchange or cheque payable either to order or to bearer."
Section 13(1) of Negotiable Instruments Act 1881
WHAT IS PROMISSORY NOTE
Promissory note is written promise for paying any certain amount to the person whose name is written in the promissory note.(a signed document containing a written promise to pay a stated sum to a specified person or the bearer at a specified date or on demand.)
TYPE OF NEGOTIABLE INSTRUMENTS
In day-to-day banking, a negotiable instrumentusually refers to checks, drafts, bills of exchange, and some types of promissory notes. ... Forms ofNegotiable Instruments. � A negotiable instrumentis a written order promising to pay a sum of money.
Most Common types of negotiable instruments are;
� Promissory notes.
� Bill of exchange.
� Check.
� Government promissory notes.
� Delivery orders.
� Customs Receipts.
Most negotiable instruments fall under the following two categories; the Negotiable instrument by statute and Negotiable instruments by custom or usages.
Negotiable instrument acts state three instruments. check, bill of exchange and promissory notes are negotiable instruments. They are therefore called negotiable instruments by statute.
Negotiable instruments by Statute are;
Promissory Notes as Negotiable Instrument
The promissory note is a signed document of written promise to pay a stated sum to a specified person or the bearer at a specified date or on demand.
The promissory note is an instrument in writing containing an unconditional rule signed by one party to pay a certain sum of money only to, or to the order of a certain person or to the bearer of the instrument.
Thus a promissory note contains a promise by the debtor to the creditor to pay a certain sum of money after a certain date. The debtor is the maker of the instrument.
Bill of Exchange as Negotiable Instrument
The Bill of Exchange contains an order from the creditor to the debtor to pay a certain person after a certain period.
The person who draws it is called drawer (creditor) and the person on whom it is drawn is called drawee (debtor) or acceptor.
The person to whom the amount is payable is called payee.
Check as Negotiable Instrument
A Check (cheque in royal Britain) is a bill of exchange drawer a specified banker not expressed to be payable otherwise than on demand.
It is an instrument in writing, containing unconditional order, signed by the maker (depositor), directing a certain banker to pay a certain sum of money to the bearer of that instrument.
Some other instruments have acquired the character of negotiability by customs or usage of trade.Negotiable instruments by custom or usages are mainly, the government promissory notes, delivery orders, and railway receipts have been held to be negotiable by usage or custom of the trade.
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WHAT IS NEGOTIABLE INSTRUMENTS
WHAT IS NEGOTIABLE INSTRUMENTS
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