COMMERCIAL LAW chapter 3- negotiable instrument.ppt

8/16/2019 COMMERCIAL LAW chapter 3- negotiable instrument.ppt

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RANACO EDUCATION & TRAININGINSTITUTE

LAW 243 COMMERCIAL LAW

CHAPTER 3

NEGOTIA BLE INSTRUMENT

3.1 Concept of negotiable instruments

3.2 Types of negotiable instruments


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LESSON OUTCOME

By the end of this chapter, students should be ableunderstand the concept of negotiable instruments and knowthe basic law governing negotiable instruments.


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3.1 CONCEPT OF NEGOTIABLEINSTRUMENTS

• !change of goods and services is the basis of every businessactivity. "oods are bought and sold for cash as well as on credit.#ll these transactions re$uire flow of cash either immediately orafter a certain time.

• %n modern business, large number of transactions involving hugesums of money take place everyday. %t is $uite inconvenient as wellas risky for either party to make and receive payments in cash.

• Therefore, it is a common practice for businessmen to make use ofcertain documents as means of making payment. &ome of thesedocuments are called 'negotiable instruments(.

&ource) &ee *egotiable instruments +www.nos.org secbuscour 1-.pdf viewed at 1/ 0ay 2 12


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&ource) see http) www.e!portfinance.gov.au ages 7ocumentarycollection.asp!Dcontent viewed at 1/ 0ay 2 12


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The essential characteristics of a bill of e!change are as follows)

1. #n unconditional order 2. %n writing3. #ddressed by one person to another

. &igned by person giving it/. Ee$uiring person to whom it is addressed to pay5. # sum certain in money-. To order of a specified person

6. &upported by consideration8. Capacity to contract1 . 7ate of bill

&ource) 9ee 0ei heng : %van ;eron 7etta, Commercial law, ar, 2 11

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1. Negotiability is a form of transfer of property(ownership) from one person to another in adocument evidencing a contractual obligation topay money ( True / alse)

!. The following are negotiable instruments which arecurrently in use except "a. che#ueb. bills of e$changec. ban% notesd. money

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COMMERCIAL LAW chapter 3- negotiable instrument.ppt

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