Professional Documents
Culture Documents
BUSINESS SCHOOL
Chandigarh
Negotiable instruments
Definition---a negotiable instrument
means a promissory note, bill of exchange
or cheque payable either to order or to
bearer.
3 kinds of negotiable instruments:1.Promissory note
2.Bills of exchange
3.cheques
AMITY GLOBAL
BUSINESS SCHOOL
Chandigarh
Characteristics of a negotiable
instrument
1.Property-the processor of the negotiable
instrument is presumed to be the owner of the
property contained therein .a N.I does not
merely gives possession of the instrument but
right to property also.
2.Negotiablility property in a N.I is freely
transferable by from one person to another.
3.Good title-a holder in due course for value ,gets
a good title even if the transferor had the
defective title.
AMITY GLOBAL
BUSINESS SCHOOL
Chandigarh
AMITY GLOBAL
BUSINESS SCHOOL
Chandigarh
Presumptions
1.Consideration it shall be presumed that every negotiable
instrument was made ,drawn, accepted , endorsed or
consideration
2.Date where a negotiable instrument is dated ,the
presumption is that it has been made or drawn on such
date, unless the contrary is proved
3.Time of acceptance-unless the contrary is proved ,every
accepted bill of exchange is presumed to have been
accepted within a reasonable time after its issue and
before its maturity
AMITY GLOBAL
BUSINESS SCHOOL
Chandigarh
AMITY GLOBAL
BUSINESS SCHOOL
Chandigarh
AMITY GLOBAL
BUSINESS SCHOOL
Chandigarh
Promissory note
"Promissory note".- A "promissory note"
is an instrument in writing (not being a
bank-note or a currency-note) containing
an unconditional undertaking signed by
the maker, to pay a certain sum of money
only to, or to the order of, a certain person,
or to the bearer of the instrument
AMITY GLOBAL
BUSINESS SCHOOL
Chandigarh
AMITY GLOBAL
BUSINESS SCHOOL
Chandigarh
Bill of exchange
"Bill of exchange".- A "bill of exchange"
is an instrument in writing containing an
unconditional order, signed by the maker,
directing a certain person to pay a certain
sum of money only to, or to the order of, a
certain person or to the bearer of the
instrument
AMITY GLOBAL
BUSINESS SCHOOL
Chandigarh
AMITY GLOBAL
BUSINESS SCHOOL
Chandigarh
Difference
1)Parties there re 3 parties to a bill of exchange, namely
the ,the drawer, the drawee and the payee: while in a
promissory note there are only 2 parties-maker and
payee
2)Nature of payment-in a B.O.E there is an unconditional
order to pay ,while in a P.N there is an unconditional
promise to pay
3)Acceptance a B.O.E requires an acceptance before it is
presented for payment whereas a promisory note does
not require any acceptance since it is signed by the
person who is liable to pay.
AMITY GLOBAL
BUSINESS SCHOOL
Chandigarh
AMITY GLOBAL
BUSINESS SCHOOL
Chandigarh
Cheque
A cheque is the means by which a person who
has funds in the hand of a bank withdraws the
same or some part of it.
A cheque must be addressed by one person to
another. So ,a bank draft is not a cheque
Crossing of cheques
Cheques are of 2 types-open and crossed
cheques
AMITY GLOBAL
BUSINESS SCHOOL
Chandigarh
AMITY GLOBAL
BUSINESS SCHOOL
Chandigarh
AMITY GLOBAL
BUSINESS SCHOOL
Chandigarh
AMITY GLOBAL
BUSINESS SCHOOL
Chandigarh
AMITY GLOBAL
BUSINESS SCHOOL
Chandigarh
AMITY GLOBAL
BUSINESS SCHOOL
Chandigarh
AMITY GLOBAL
BUSINESS SCHOOL
Chandigarh
AMITY GLOBAL
BUSINESS SCHOOL
Chandigarh
AMITY GLOBAL
BUSINESS SCHOOL
Chandigarh
Parties to a cheque
1.The drawer: he is the person who draws
the cheque
2.The drawee: the banker on whom the
cheque is drawn
3.Payee