negotiable instruments .pptx - NEGOTIABLE INSTRUMENTS ACT,...

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NEGOTIABLEINSTRUMENTS ACT,1881
The Negotiable Instruments Act, 1881An Act to define and Law relating to negotiable instrumentswhich are Promissory Notes, Bills of Exchange and chequesCitationAct No. 26 of 1881Enacted byImperial Legislative Council (India)Date enacted9 December 1881Date commenced1 March 1882Status: In force
Negotiable InstrumentsNegotiable Instruments is the name of a documentthat promises to pay a sum of money. Thedocument states that the signer of the documentagrees to pay the owner of the document a setamount of money which is also stated on thedocument.A check is considered a negotiable instrument.This type of instrument is a transferable, signeddocument that promises to pay the bearer a sumof money at a future date or on demand. Examplesalso include bills of exchange, promissory notes,drafts and certificates of deposit.
A negotiable instrument can be transferredfrom one person to another. Once theinstrument is transferred, the holder obtainsfull legal title to the instrument.Examples: Negotiable instruments includepromissory notes, bills of exchange, banknotes and cheques.
In order to write a negotiable instrument underArticle 3, the following requirements must be met:
Kinds of Negotiable Instruments:I.Promissory NotesII.Certificates of DepositIII.DraftsIV.Cheques
Promissory NotesThe promissory note is the simplest form ofcommercial paper; it is simply apromisetopay money. Apromissory noteis a two-partyinstrument in which one person (known asthemaker) makes an unconditional promisein writing to pay another person (thepayee),a person specified by that person, or thebearer of the instrument, a fixed amount ofmoney, with or without interest, either ondemand or at a specified, future time.
Certificates of DepositThe certificate of deposit given by a bank or asavings and loan association when a depositof money is made is a type of note, namely anote of a bank. Acertificate of depositis aninstrument containing (1) anacknowledgment by a bank that it hasreceived a deposit of money and (2) apromise by the bank to repay the sum ofmoney.
DraftsAdraftis a form of commercial paper thatinvolves anorderto pay money rather than apromise to pay money.The most common example of a draft is acheck.

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Term
Fall
Professor
NoProfessor
Tags
Cheque, Negotiable instrument, Examples, special crossing

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