Negotiable Instruments Law

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CHAPTER XVI: PROMISSORY NOTES AND CHECKS

I.Definition

„XSTALE CHECK ¡V is one which has not been presented for payment within a reasonable time after its issue. It is valueless, therefore, should not be paid.

„XCERTIFICATE OF DEPOSIT¡V is a written acknowledgement by a bank of the receipt of money on deposit which the bank promises to pay the depositor, bearer, or to some other person, to the order of the depositor, or to him, or his order.

„XTRAVELER¡¦S CHECK ¡V is one upon which the holder¡¦s signature must appear twice, one to be affixed by him at the time it is issued and the second or counter-signature, to be affixed by him n the presence of the payee before it is paid, otherwise it is incomplete. „XBOND ¡V is an evidence of indebtedness issued by a public or private corporation, promising to pay a sum of money on day certain in the future time.

II.Discussions

1.Give four differences between a check and an ordinary Bill of Exchange.

CheckOrdinary BOE
Always drawn on a bankMay or may not be drawn on a bank
Always payable on demandEither payable on demand, or at a fixed or determinable future time Supposed to be drawn against previous deposits of fundsNeed not be drawn against a deposit Need not be presented foe acceptanceRequired to be present for acceptance in certain cases Ordinarily intended for immediate paymentFor circulation as an instrument of credit The death of the drawer of a check with the knowledge of the bank revokes the authority of the bank to payThe death of the drawer of an ordinary bill does not revoke the authority of the drawee to pay Must be presented for payment within a reasonable time after its issueMust be presented within a reasonable time after its last negotiation The drawer of a check not presented within a reasonable time after its issue is discharged from liability to the extent of the loss caused by the delayThe drawer of an ordinary bill is totally discharged When accepted or certified,...
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