The Negotiable Instrument Act of 1881 defines and regulates negotiable instruments like promissory notes, bills of exchange, and cheques in India. It defines a negotiable instrument as a document that can be transferred to another party, and outlines characteristics like being in writing, containing an unconditional undertaking to pay a certain sum of money, and enabling the holder to receive payment. The Act also specifies types of negotiable instruments and endorsements that can be made for the purpose of negotiation.

2. The Negotiable Instrument Act, 1881

3. The Negotiable Instrument Act, 1881 Introduction: Negotiable means transferable. Instrument means document. Negotiable instrument, therefore, means a transferable document. The law relating to negotiable instruments is contained in the Negotiable Instruments Act, 1881 Definition: Section 13 of the Negotiable Instrument Act, 1881, defines a negotiable instrument as: “A negotiable instrument means a promissory note, bill of exchange or cheque payable either to order or to bearer.” Explanation: The Act narrows down the meaning of instrument. It regulates only three types of instruments, viz., Promissory Notes, Bills of Exchange and Cheques. A negotiable instrument is one which entitles the holder to the receipt of money. It gives him the right to transfer the same by mere delivery or endorsement thereon. The negotiability of the instrument continues till its maturity.

4. The Negotiable Instrument Act, 1881 Characteristics\Features of Negotiable Instrument Property: Good Title to the Instrument Rights of Holder in Due Course Writing & Signature Payment Payable by legal Tender Money of India: No Need of giving Notice

5. The Negotiable Instrument Act, 1881 Promissory Notes Definition: Section 4 defines a promissory notes as under: “A ‘promissory note’ is an instrument in writing (not being a bank-note or a currency-note), 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.” Essentials Characteristics of a Promissory Note All kinds of negotiable instruments, including a promissory note, must be in writing The instrument must contain an express or unconditional promise to pay

6. The Negotiable Instrument Act, 1881 Types of Promissory Notes There are four kinds of promissory notes, and they are : Promissory notes payable on demand; Promissory notes payable after date; Joint promissory notes; and Joint and several promissory notes.

7. The Negotiable Instrument Act, 1881 Bills of Exchange Definition: “ Section 5 defines a bill of exchange as 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.” Essentials\Characteristics of Bill of Exchange Writing Parties Drawee and Acceptor Order to Pay An Unconditional Order to Pay Signed by Drawer Payee must be certain Stamping .

8. The Negotiable Instrument Act, 1881 Types of Bills of Exchange There are five types of bills of exchange namely: Bill of exchange payable on demand. Bill of exchange payable after date, Inland bill of exchange, Foreign bill of exchange, Accommodation bill of exchange.

9. The Negotiable Instrument Act, 1881 Cheques Definition: Section 6 defines a cheque as under: “A cheque is a bill of exchange, drawn on a specified banker and not expressed to be payable otherwise than on demand.” Essentials\Characteristics of a Cheque Instrument in Writing Unconditional Order Payable on Demand Certain Sum of Money Payee must be Certain Types of Cheque Those which are uncrossed are popularly known as “bearer” or open cheques Crossed Cheques.

10. The Negotiable Instrument Act, 1881 Endorsements The Negotiable Instrument act of 1881 defines endorsement as "when the maker or the holder of the Negotiable Instrument. signs the same otherwise that as maker for the purpose of negotiation on the back or on the face thereof or on a slip of paper annexed there to or so sign for the same purpose a stamp paper intended to be completed as an negotiable instrument, he is said to have endorsed the same & he is called a endorser A-person who endorses a negotiable instrument is endorser. A person in whose favour endorsement is made is called endorsee. & the act of signing a negotiable instrument for the purpose of negotiation is called endorsement.

11. The Negotiable Instrument Act, 1881 Kinds of a Endorsement General or Blank Endorsement Full or Special Endorsement Partial Endorsement Restrictive Endorsement - (R.&) Conditional or Qualified Endorsement Facultative Endorsement:- (F.E.)

12. The Negotiable Instrument Act, 1881 Question and Answers

13. The Negotiable Instrument Act, 1881 Thank You