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Types of the negotiable instruments
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Types of the negotiable instruments

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  • 1. Types Of The Negotiable Instruments Created By: Piyush Dobariya (16)
  • 2. Negotiable Instruments • What is negotiable? • Negotiable means transferable. • The negotiation that goes on refers to the transfer of the instrument between two people, or from one bank to another, or even from one country to another. • What is an instrument? • In the broadest sense, almost any agreed-upon medium of exchange could be considered a negotiable instrument. • In day-to-day banking, a negotiable instrument usually refers to checks, drafts, bills of exchange, and some types of promissory notes.
  • 3. Forms of Negotiable Instruments • A negotiable instrument is a written order promising to pay a sum of money. • A document becomes negotiable when it contains an unconditional promise to pay money and is payable to a bearer or payable on demand.
  • 4. Nature of the negotiable instrument are: Be in writing Be signed by the maker or drawer Be an unconditional promise or order to pay State a fixed amount of money Be freely transferable from one to another person Be payable on demand or at a definite time Be payable to order or to bearer
  • 5. Types of negotiable instrument Cheque Bill of exchange Promissory note
  • 6. Checks Legal definition:(S 6) “A" cheque" is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand”.  NATURE 1. Always drawn on specified bank, 2. Always payable on demand. 3. Unconditional order 4. Certain sum of money 5. Sing 6. Banker name 7. Codes 8. Writing etc.
  • 7. Parties of Check Drawer : who makes cheque. Drawee : Always banker. Payee : whom the amount payable
  • 8. Standard Features of a Check
  • 9. Promissory Note  Legal definition:(S 6) "A" promissory note" is an instrument in writing containing an unconditional undertaking, signed by the maker, to pay a certain sum of money only to, or to the order of, a certain person, or to the bearer of the instrument.  Illustrations : • A signs instruments in the following terms • (a) " I promise to pay B or order Rs. 500." • (b) I promise to pay B Rs. 500 which shall be due to him.“ • (c) " I promise to pay B Rs. 500 seven days after my marriage with C."
  • 10. Parties Of Promissory Note  Maker : who makes PN.  Payee : whom the amount payable
  • 11. Essentials Of Valid Promissory Note  Must be in writing  Must be unconditional  Must express promise to pay  Must in term of money only  Must pay in certain amount of money  Must contain certain parties  Must be signed by maker  Other formalities like date, consideration etc.
  • 12. Standard Features of a PN
  • 13. Bill of exchange  Legal definition:(S 5) “ A" bill of exchange" is an instrument in writing, containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of, a certain person or to the bearer of the instrument.”  Parties Of Promissory Note:-  Drawer : who makes BE  Drawee : Always ACCEPTOR.  Payee : whom the amount payable
  • 14. Essentials Of Valid Bill Of Exchange  Must be in writing  Must be unconditional  Must express order to pay  Must in term of money only  Must pay in certain amount of money  Must contain certain parties  Must be signed by drawer  Other formalities like date, consideration, attestation etc.
  • 15. Standard Features of a BE
  • 16. OTHER TYPES  Inland instrument  Foreign instrument  Bearer instrument  Order instrument  Instrument payable on demand  Time instrument
  • 17. Thankssssssssss to yyyyyou

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