Which of the following are the Negotiable Instruments?

By Harshal Vispute|Updated : July 29th, 2022

A negotiable instrument is a piece of paper that, following the Negotiable Instrument Act of 1881, entitles a person to a quantity of money and is transferable from one person to another. Promissory notes, bills of exchange, and cheques are all examples of negotiable instruments. The Negotiable Instruments Act of 1881 regulates all forms of negotiable currency, including checks, bills of exchange, and promissory notes. A "negotiable instrument" is a piece of paper that can be transferred from one person to another.

An instrument could not be negotiable unless such and in such a state that the true owner could transfer the contract or engagement contained therein by simply delivering the instrument. According to the definition, it is "an instrument, the property in which is acquired by anyone who takes it bona fide, and for value, notwithstanding any defect of title in the person from whom he took it."

Characteristics of the Negotiable Instruments Act, 1881

  • The property contained in the instrument is assumed to belong to the person holding it.
  • They can be freely moved.
  • A holder in good standing receives the instrument free of all title defects of any prior holder.
  • In due course, the holder has the right to bring a claim against the instrument in his own name.
  • The instrument can be transferred until it matures, or in the case of checks, until it expires (on the expiry of 6 months from the date of issue).
  • Unless the contrary is proven, certain equal presumptions apply to all negotiable instruments.

Summary:

Which of the following are the Negotiable Instruments?

A negotiable instrument means a promissory note, bills of exchange, or cheques payable to the order or the bearer. The Negotiable act 1881 is the law related to all negotiable instruments such as promissory notes, bills of exchange, and cheques. The meaning of “Negotiable Instruments” means the exchange or give and take of documents from one person to another. The definition of a negotiable instrument is an instrument that cannot be negotiable unless such and in such a state that the true owner could transfer the contract or engagement contained therein by simply delivering the instrument. This is because property in such an instrument is acquired by anyone who takes it honestly and for value, regardless of any title defect in the person from whom he took it.

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Which of the following are the Negotiable Instruments FAQ's

  • Written agreements between two parties that prove a financial transaction has been agreed upon include bills of exchange and promissory notes. Promissory notes are more frequently used in domestic trade than in international trade, which uses bills of exchange more frequently.

  • The Negotiable Instruments Act of 1881 regulates all forms of negotiable currency, including cheques, bills of exchange, and promissory notes. A "negotiable instrument" is a piece of paper that can be transferred from one person to another.

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