Chapter 5-Chapter 5-

Negotiable InstrumentsNegotiable Instruments

NegotiabilityNegotiability

Free TransferabilityFree Transferability Good Title free from the defective title of Good Title free from the defective title of

transferortransferor GoodfaithGoodfaith Obtained for ValueObtained for Value Holder need not prove the above-they Holder need not prove the above-they

are presumed to existare presumed to exist

Transferability & NegotiabilityTransferability & Negotiability

Nature of Negotiable InstrumentsNature of Negotiable Instruments

-Demand or Time Instruments-Demand or Time Instruments

-Order or Bearer Instruments-Order or Bearer Instruments

Types of Negotiable Types of Negotiable InstrumentsInstruments

Negotiable by LawNegotiable by Law

-Bill of Exchange-Bill of Exchange

-Cheque-Cheque

-Promissory Note-Promissory Note

Negotiable by Negotiable by UsageUsage

-Bank Draft-Bank Draft

-Dividend Warrant-Dividend Warrant

-Interest Warrant-Interest Warrant

-Certificate of -Certificate of DepositDeposit

-Commercial paper-Commercial paper

Bill of Exchange: Definition , Bill of Exchange: Definition , Features & SpecimenFeatures & Specimen

WritingWriting

OrderOrder

Unconditional orderUnconditional order

Signature of MakerSignature of Maker

Certain DraweeCertain Drawee

Certain AmountCertain Amount

Payment of MoneyPayment of Money

Nature of InstrumentNature of Instrument

Cheque: Definition , Features & Cheque: Definition , Features & SpecimenSpecimen

Features of a Bill of Features of a Bill of ExchangeExchange

-writing-writing

-order to pay-order to pay

-payment of money-payment of money

-signature of maker-signature of maker

-certain amount-certain amount

-bearer or order-bearer or order

Other FeaturesOther Features

-drawn on a banker-drawn on a banker

-payable only on -payable only on demanddemand

Differences Between a Bill of Exchange and a Differences Between a Bill of Exchange and a ChequeCheque

DraweeDrawee

NatureNature

FormForm

AcceptanceAcceptance

Days of GraceDays of Grace

Notice of DishonourNotice of Dishonour

Legal BarLegal Bar

Statutory ProtectionStatutory Protection

Countermanding PaymentCountermanding Payment

Death-Insolvency of Death-Insolvency of DrawerDrawer

Promissory NotePromissory Note

DefinitionDefinition

Essential FeaturesEssential Features

SpecimenSpecimen

Crossing of ChequesCrossing of Cheques

Meaning of Crossing Meaning of Crossing Types of Crossing: General Crossing and Types of Crossing: General Crossing and

Special CrossingSpecial Crossing Examples of CrossingExamples of Crossing Account Payee CrossingAccount Payee Crossing Not Negotiable CrossingNot Negotiable Crossing Persons Authorised to Cross ChequesPersons Authorised to Cross Cheques Cancellation of CrossingCancellation of Crossing

EndorsementEndorsement

MeaningMeaning Types of Endorsement: Blank, Full, Types of Endorsement: Blank, Full,

Restrictive, Conditional, Sans Restrictive, Conditional, Sans Recourse,Conditional,Facultative & Sans Recourse,Conditional,Facultative & Sans FraisFrais

Regularity of EndorsementRegularity of Endorsement

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