Discharge of Negotiable Instruments L08 Explain how the liability of a party to pay an instrument is normally discharged. Discharge of Liability The obligation of a party to pay an instrument is discharged (1) if he meets the requirements set out in Revised Article 3 or (2) by any act or agreement that would discharge an obligation to pay money on a simple contract. Discharge of an obligation is not effective against a person who has the rights of a holder in due course of the instrument and took
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Mumbai Educational Trust’s Institute of Management Course: PGDM (e-BUSINESS) Batch: 2014-16 Semester: I Subject: Legal Aspects of Business Topic: Evolution and Revolution of Negotiable Instruments as Facilitators for Trade and Commerce & 10 years taking forward Group: 4 Content Sr No. Particular Page No. 1 Introduction of Negotiable Instruments 3 2 Need of Negotiable Instrument 6 3 Features of Negotiable Instrument 8 4 Types of Negotiable
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Kinds of Endorsement The main types of endorsements are as under:-- (1) Blank or general endorsement. If the holder of the instrument signs his name only and delivers it to the endorsee‚ it is called general or blank endorsement. (2) Full endorsement. It contains not only the signature of the endorser but specifies the endorsee or to his order also. (3) Restrictive endorsement. Here the endorser uses such words in endorsement which restricts further negotiation and transfer of bills. (4) Sans
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d. must be payable to order or bearer 2. Which of the following is not an essential element of a bill of exchange? a. must be written and signed by the drawee b. must contain an unconditional promise to pay a sum certain in money c. must be payable to order or bearer d. drawee must be named therein 3. The following are negotiable except a. “Pay to bearer Jose Cruz P 10‚000 upon demand”‚ signed by A and addressed to B b. “Pay to Jose Cruz or bearer P 10‚000 upon demand”‚ signed by
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CPA Regulation Negotiable Instruments and Secured Transactions Negotiable Instruments and Secured Transactions What is a note and who are the parties to a note? © 2011 HOCK international 91 A note is a written promise to pay money. Notes are different from drafts in that notes are a promise to pay. If there is any doubt whether a document is a note or a draft‚ the holder of the document can decide what it is. There are two parties involved in a note. 1) The Issuer (Maker) is
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payable to order or bearer b) That must be in writing c) Which must be an unconditional promise or order d) The payee must be identified 2. The following are the functions of a negotiable instruments‚ EXCEPT: a) It operates as a substitute for money. b) It is a means of creating and transferring of credits. c) It facilitates the sale of goods and increases the purchasing medium in circulation. d) It is legal tender 3. An instrument is payable to bearer except: a)
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in the title of the prior party . DEFINITION [SEC 13] A negotiable instrument means - A promissory note; or - Bill of exchange; or - Cheque - Payable either to order or Bearer. CHARACTERISTICS OF NEGOTIABLE INSTRUMENT {SEC 13} 1 Freely transferable from one person to another person. 2 The holder in due course obtains good title of the instrument notwithstanding any defect in the previous holder. 3 HDC of a negotiable instrument
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NI provides holder two rights:- 1. To receive amount specified in such document from person who is liable 2. To transfer aforesaid right to any other person Applicability :- 1. Location: Whole India except state of J&K 2. Instrument based: Section 13 gives definition of NI B/E‚ Pro Note and Cheque - For DD it is applicable - Not App on share certificate - Not App on share warrant - Not App on Document of title - Not App on Currency note - Not App on Bonds/Commercial papers/ T Bills/
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person to another person or to bearer (持票人) Drawer (开票人) – the person who signs or makes the order to pay Drawee (付款人) – the person to whom the order to pay is made Payee (收款人) – the person to whom payment is ordered Check A draft drawn on a bank and payable on demand. (With certain types of checks‚ such as cashier’s checks‚ the bank is both the drawer and the drawee) Promises to pay Promissory note (本票，期票) A promise by one party to pay money to another party or to bearer Maker (出票人) – the person
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Q#1: A draws a bill payable to B or order with X‚ as the drawee. The bill was successively endorsed to C‚ D‚ E and F‚ holder. X does not pay and F has duly protested non-payment. Y pays for the honor of C. Which of the following statement is wrong? a. D is discharged. b. E is discharged. c. C is discharged. d. Y can ask reimbursement from A. Answer: C All parties subsequent to the party whose honor it is paid are discharged but the payor for honor is subrogated for‚ and succeeds to
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