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Sukhpreet Kaur, Lovely Professional University Unit 6: Law of Negotiable Instruments

Unit 6: Law of Negotiable Instruments Notes

CONTENTS
Objectives
Introduction
6.1 Negotiable Instrument
6.2 Important Terms and Essential of Negotiable Instrument
6.3 Promissory Notes and Bills of Exchange
6.3.1 Promissory Note
6.3.2 Bill of Exchange
6.3.3 Distinction between a Promissory Note and a Bill of Exchange
6.4 Cheques
6.4.1 Specimen of a Cheque
6.4.2 Requisites of a Cheque
6.5 Holder and Holder in due Course
6.6 Negotiation of a Negotiable Instrument
6.7 Presentment
6.8 Dishonour
6.9 Crossing of Cheques
6.10 Paying Banker
6.11 Summary
6.12 Keywords
6.13 Self Assessment
6.14 Review Questions
6.15 Further Readings

Objectives

After studying this unit, you will be able to:
Discuss meaning of negotiable instrument
Describe promissory notes and features of promissory note
Explain law relating to paying and collector banker

Define bill of exchange
Introduction

In the earlier unit, you came to know about the law of sales of goods. In this unit, you will study
about the law of negotiable instruments.
In this unit, you will study law relating to negotiable instruments is primarily contained in the
st
Negotiable Instruments Act, 1881, which came into force on 1 March, 1882. Bills of exchange,
cheques and promissory notes have been dealt with in considerable detail in this Act.

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