Which of the following is a Negotiable Instrument ?

Why Promissory Notes, Cheque, and Bill of exchange are Negotiable Instruments?

Promissory Note:

• A promissory note is a formal financial promise made by one party to another that they will repay a debt on a specific date. It is a formal contract that the drawer signs, promising to pay the money when requested or by a certain date.
• This note is a short-term credit instrument that has nothing to do with money or banknotes.

Cheque:

• Using a check, one party can instruct the bank to transfer money to the bank account of another party. It falls under the provisions of the Negotiable Instruments Act of 1881 because it is a negotiable instrument. 
• The drawer, who writes the check, the drawee, or bank, which must transmit the money, and the payee, or individual in whose name the check has been issued, are the three parties engaged in the transaction. 
• Either a savings account or a current account may be used to fund a check.

Bill of Exchange:

• A bill of exchange is a written document that binds one party to pay another party a specific amount of money on demand or at a specific date. It is most commonly used in international trade.
• A bill of exchange is a document that obligates one party to pay another party a specific amount of money either immediately upon demand or at a later date.
• Three persons are frequently involved in a bill of exchange: the drawer, who obligates the drawee to pay the payee, the payee, who receives the money, and the drawee, who pays the money.
• In international trade, importers and exporters utilise bills of exchange to complete transactions.

Summary:

Which of the following is a Negotiable Instrument? (a) Promissory Note (b) Cheque (c) Bill of Exchange (d) All of the above

Promissory Notes, Cheque, and Bill of Exchange are negotiable instruments. So option (4) is the correct option. The definition of negotiable instruments is stated in the Negotiable Instrument Act of 1881.