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Which of the following statement is false:
  • a)
    B/R is a negotiable instrument
  • b)
    B/R must be accepted by drawee.
  • c)
    There can be three parties in respect of bills of exchange – drawer, drawee & payee
  • d)
    Oral bill of exchange is also valid.
Correct answer is option 'D'. Can you explain this answer?
Most Upvoted Answer
Which of the following statement is false:a)B/R is a negotiable instru...
False Statement: Oral bill of exchange is also valid.

Explanation:

Bill of Exchange:
A bill of exchange (B/R) is a negotiable instrument that is used in international trade and commerce to facilitate the transfer of funds between parties. It is a written order from the drawer (creditor) to the drawee (debtor) to pay a certain amount of money to the payee (beneficiary) on a specified date.

Three Parties in Respect of Bills of Exchange:
In the context of bills of exchange, there are typically three parties involved:

1. Drawer: The drawer is the person or entity who issues the bill of exchange. They are the creditor or seller who is entitled to receive payment from the drawee.

2. Drawee: The drawee is the person or entity on whom the bill is drawn. They are the debtor or buyer who is obligated to make the payment to the payee.

3. Payee: The payee is the person or entity who is entitled to receive the payment. They are the beneficiary or seller who will receive the funds from the drawee.

Validity of Oral Bill of Exchange:
An oral bill of exchange is not valid. According to the Negotiable Instruments Act, 1881, a bill of exchange must be in writing and must fulfill certain requirements to be considered valid. These requirements include:

1. The bill must be in writing and signed by the drawer.
2. It must contain an unconditional order to pay a certain sum of money.
3. The payment must be made to a specific person or their order.
4. The bill must be payable on demand or at a specific future date.

An oral agreement does not fulfill these requirements, and therefore, an oral bill of exchange is not legally binding or enforceable.

Conclusion:
The false statement is option D, "Oral bill of exchange is also valid." An oral bill of exchange is not valid because it does not meet the legal requirements for a bill of exchange, which include being in writing and containing an unconditional order for payment.
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Which of the following statement is false:a)B/R is a negotiable instrumentb)B/R must be accepted by drawee.c)There can be three parties in respect of bills of exchange drawer, drawee payeed)Oral bill of exchange is also valid.Correct answer is option 'D'. Can you explain this answer?
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Which of the following statement is false:a)B/R is a negotiable instrumentb)B/R must be accepted by drawee.c)There can be three parties in respect of bills of exchange drawer, drawee payeed)Oral bill of exchange is also valid.Correct answer is option 'D'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Which of the following statement is false:a)B/R is a negotiable instrumentb)B/R must be accepted by drawee.c)There can be three parties in respect of bills of exchange drawer, drawee payeed)Oral bill of exchange is also valid.Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following statement is false:a)B/R is a negotiable instrumentb)B/R must be accepted by drawee.c)There can be three parties in respect of bills of exchange drawer, drawee payeed)Oral bill of exchange is also valid.Correct answer is option 'D'. Can you explain this answer?.
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