Negotiable Instrument Act 1881

4091 Words17 Pages
The Negotiable Instrument Act 1881
Compiled By Neelakshi Jaidka

OBJECTIVES After reading this lesson, you should be able to- • Understand meaning, essential characteristics and types of negotiable instruments; • Describe the meaning and marketing of cheques, crossing of cheques and cancellation of crossing of a cheque; • Explain capacity and liability parties to a negotiable instruments; and • Understand various provisions of negotiable instrument Act, 1881 regarding negotiation, assignment, endorsement, acceptance, etc. of negotiable instruments. INTRODUCTION * The Negotiable Instruments Bill was passed by the Council and received assent on December 9, 1881. The Act came into force from March 1, 1882. * Prior to its
…show more content…
5.Payee to be a certain person: - Promissory note should specify the payee in clear terms i.e. by name, son of, and resident of, etc. The payment can also be identified by description.
6.Certain some of money:- Sum payable must be certain or capable of being made certain. The sum shall be deemed to be certain when the rate of interest is specified. Money may be payable in installments is also a valid promissory note.
Examples:- “I promise to pay Balu, Rs. 10,000, and all other sums which shall be due’’ is not valid since the sum is not certain.
7.Payment of Money only:- There must be a promise to pay only money and not other consideration, e.g. “I promise to pay B a sum of Rs. 50,000 and deliver him my Scorpio Car’’ is not valid.
8.Duly stamped and dated:- Stamps of requisite amount and description must be affixed on the instrument and duly cancelled either before or at the time of its execution. If the promissory note is not dated, it is presumed to have been made on the date of its delivery.

Bill of exchange {Sec. 5} Definition: - A ‘bill of exchange’ is an instrument in Writing containing an unconditional order, singed by the maker, directing a certain person to pay a certain a sum of money only to, a certain person; or the order of a certain person; or the bearer of the instrument. Essentials Characteristics of a Bill of Exchange
(a) It must be in writing

More about Negotiable Instrument Act 1881

Get Access