PPT - Negotiable Instrument | Business Law - B Com PDF Download

 Page 2


W h a t is N e g o t ia b le 
In s t r u m e n t s ?
?
The term negotiable instruments means a written document 
which entitles a person to a sum of money.
?
A negotiable instruments is transferable by delivery or by 
endorsement and delivery.
?
The transfer entitles a person to the sum of money mentioned 
therein.
?
“Thus the negotiable instrument is a document which is 
legally recognized by custom of trade or law, transferable by 
delivery or by endorsement and delivery.”
Page 3


W h a t is N e g o t ia b le 
In s t r u m e n t s ?
?
The term negotiable instruments means a written document 
which entitles a person to a sum of money.
?
A negotiable instruments is transferable by delivery or by 
endorsement and delivery.
?
The transfer entitles a person to the sum of money mentioned 
therein.
?
“Thus the negotiable instrument is a document which is 
legally recognized by custom of trade or law, transferable by 
delivery or by endorsement and delivery.”
Characteristics Of a Negotiable Instrument
?
Freely transferable:  The property in a negotiable instrument passes from one 
person to another by a simple process, i.e., by mere delivery if it is payable to 
bearer, and  by endorsement and delivery if it is payable to order.
?
Holder’s title free from all defects:  The holder in due course (one who 
acquires the instrument in good faith and for consideration) gets it free from all 
defects.
?
Recovery:  One can sue upon the instrument in his own name.
?
Payable to order or bearer: - It must be payable either to order or bearer
?
Presumption as to Holder:- Every holder of negotiable instrument is presumed 
to be holder in due course.
?
Presumption as to considerations:- Every negotiable instrument is presumed to 
have been made, drawn, accepted, endorsed , negotiated or transferred for 
consideration.
Page 4


W h a t is N e g o t ia b le 
In s t r u m e n t s ?
?
The term negotiable instruments means a written document 
which entitles a person to a sum of money.
?
A negotiable instruments is transferable by delivery or by 
endorsement and delivery.
?
The transfer entitles a person to the sum of money mentioned 
therein.
?
“Thus the negotiable instrument is a document which is 
legally recognized by custom of trade or law, transferable by 
delivery or by endorsement and delivery.”
Characteristics Of a Negotiable Instrument
?
Freely transferable:  The property in a negotiable instrument passes from one 
person to another by a simple process, i.e., by mere delivery if it is payable to 
bearer, and  by endorsement and delivery if it is payable to order.
?
Holder’s title free from all defects:  The holder in due course (one who 
acquires the instrument in good faith and for consideration) gets it free from all 
defects.
?
Recovery:  One can sue upon the instrument in his own name.
?
Payable to order or bearer: - It must be payable either to order or bearer
?
Presumption as to Holder:- Every holder of negotiable instrument is presumed 
to be holder in due course.
?
Presumption as to considerations:- Every negotiable instrument is presumed to 
have been made, drawn, accepted, endorsed , negotiated or transferred for 
consideration.
Types of Negotiable Instruments
?
 Promissory note.
?
 Bill of exchange.
?
 Cheque.
Page 5


W h a t is N e g o t ia b le 
In s t r u m e n t s ?
?
The term negotiable instruments means a written document 
which entitles a person to a sum of money.
?
A negotiable instruments is transferable by delivery or by 
endorsement and delivery.
?
The transfer entitles a person to the sum of money mentioned 
therein.
?
“Thus the negotiable instrument is a document which is 
legally recognized by custom of trade or law, transferable by 
delivery or by endorsement and delivery.”
Characteristics Of a Negotiable Instrument
?
Freely transferable:  The property in a negotiable instrument passes from one 
person to another by a simple process, i.e., by mere delivery if it is payable to 
bearer, and  by endorsement and delivery if it is payable to order.
?
Holder’s title free from all defects:  The holder in due course (one who 
acquires the instrument in good faith and for consideration) gets it free from all 
defects.
?
Recovery:  One can sue upon the instrument in his own name.
?
Payable to order or bearer: - It must be payable either to order or bearer
?
Presumption as to Holder:- Every holder of negotiable instrument is presumed 
to be holder in due course.
?
Presumption as to considerations:- Every negotiable instrument is presumed to 
have been made, drawn, accepted, endorsed , negotiated or transferred for 
consideration.
Types of Negotiable Instruments
?
 Promissory note.
?
 Bill of exchange.
?
 Cheque.
Promissory note.
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.