Negotiable instrument:
It is a
written document, money. A negotiable instrument is transferable to the another
person. Under the negotiable instrument act 1881.
“Characteristics”
Negotiable Instrument have following features.
1.
Transferable by delivery:
negotiable instrument is transferable from one person to
another by delivery or by endorsement and delivery.
2.
Entitled to receive money:
The legal person of the instrument is
entitled to receive money mentioned in it.
3.
Filing a sue:
The holder of a negotiable instrument
has the right to document a sue in his name for payment from all or any of the
concerned parties.
4.
Transferee is not affected by defective title:
If the transferee must has accepted the
negotiable instrument in good faith, then he is not affected by the defective
title of the transfer in any way.
“Kinds of negotiable instruments”
There are three kinds of negotiable
instruments.
1.
Promissory note:
A promissory note is the simple and
earliest kind of credit instrument. there is no conditional written promise by
one person to another in which the maker promise to pay an demand or at a fixed
or determinable date in the future, a stated sum of money pad to or to the
order of a.
2.
Bill of exchange:
It is a written document drawn by the
seller on the buyer to pay certain amount of money on due date.
3.
Cheque:
A cheque may be defined as, “a
written order of a depositer upon a bank to pay to or to the order of a
designated party or a bearer, a specified sum of money on demand”.
Most Common types of negotiable instruments are;
ReplyDelete- 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.