• Skip to main content
  • Skip to secondary menu
  • Skip to primary sidebar
  • Skip to footer
  • HOME
  • CONTACT US
  • All Essays
  • JEE Main 2022

Study Today

Largest Compilation of Structured Essays and Exams

  • Essay⯆
    • Freedom Fighters
    • Leaders
    • Events
    • Festival
  • JEE Main
  • Scholarship 2022
    • Class 1
    • Class 2
    • Class 3
    • Class 4
    • Class 5
    • Class 6
    • Class 7
    • Class 8
    • Class 9
    • Class 10
    • Class 11
    • Class 12
  • Speech
  • History
  • General Knowledge
    • Things to Know⯆
    • Blog

Characteristics of Negotiable Instruments | PDF Download

January 6, 2018 by Study Mentor Leave a Comment

Negotiable instrument is like a contract. It is a document with set of rules which guarantees the payment of a certain amount of money at a set of time. In this document the payer’s name is mentioned. The time with in which the money is to be paid is decided by the payer (the person who is paying) and the payee (the person who is receiving the money from the payer).

The law, in which the subject of negotiable instrument is mentioned, is the Negotiable Instrument Act, 1881 (the act defines in details the law relating to negotiable instruments). Prior to this act, the provisions of the English Negotiable Instrument Act were applicable in India and the present act is also based on the English act with certain modifications.

This is the written document which acts as the proof that the payer has to pay a specific amount of money to the payee within a certain time. After the payment is made within due time as mentioned in the negotiable instrument, the document is null and void but if the payer fails to pay the money then the payee has the right to go to the authority and register a complaint against the payee for not fulfilling his end of the bargain as stated by him in the document.

The negotiable instrument is one of the safest option by which the payee can get money from the payer. Most common types of negotiable instruments are as follows –  

  • Promissory notes 
  • Bills of exchange 
  • Cheques 
  • Government promissory notes 
  • Delivery orders 
  • Customer receipts etc. 

Table of Contents

  • Essential features of Negotiable Instruments
  • Characteristics of Negotiable Instruments
    • Conclusion  

Essential features of Negotiable Instruments

There are many features of negotiable instruments. Some of the most important features are as follows –  

  • Payer and payee: Without payer and payee there cannot be any negotiable instruments. The person who will pay the money is called payer and the person who will receive the money is called payee. 
  • Written document: The document has to be written to be a negotiable instrument. It also should contain the details according to the rules mentioned in the different types of negotiable instruments. 
  • Signature: Signature is the most important feature of negotiable instruments. Without signature, a negotiable instrument is null and void. So, the parties involved in the negotiable instruments must sign the document as mentioned in the rules. 
  • Amount to be paid: The amount of money that is to be paid by the payer should be mentioned clearly in the negotiable instruments.  
  • Transferability: A negotiable can be transferable if the payee wants it to be. But it can also be made non-transferable by using certain words like paid only etc.  

Characteristics of Negotiable Instruments

  • Property – The processor of the negotiable instruments is considered as the owner of the document. A negotiable instrument does not just give possession of the document but the right of property also. The property can be transferred and in that case the payer will give the money to the bearer of the property. 
  • Title – The holder in good faith and for value called the “Holder in due course” gets the instrument free from all defects of any previous holder. 
  • Payment – A negotiable instrument enables the holder to expect prompt payment. The instrument may be made payable to two or more payees jointly. 
  • Rights – The transferee of negotiable instrument can take legal action in his own name, in case of dishonour. A negotiable instrument can be transferred many number of times till the date of maturity. The holder of instrument need to give notice of transfer to the party legally responsible on the instrument to pay.  
  • Presumptions – Certain presumptions apply to all negotiable instruments like a presumption that consideration has been paid under it. The words ‘for value received ’ or similar expressions like that is not necessary to write in the promissory note because the payment of consideration is presumed.  

Conclusion  

Negotiable instrument is a document that guarantees payment of specific amount of money within a set of time. The negotiable instruments rules are guided by the Negotiable Instruments Act, 1881. This document is the proof that the payer will give a certain amount of money to the payee.

However, this document is transferrable and can be transferred any number of times till the maturity date but if it is mentioned specifically that the document will remain with the person who originally owed the money then the document cannot be transferred.

If the payer fails to give the money or dishonour the negotiable instrument, then legal action can be taken against that person and the negotiable instrument then will act as evidence in the eyes of law.

There are many kinds of negotiable instrument and some of the most important ones are promissory notes, bills of exchange etc. The negotiable instrument should be signed and the payer name should be mentioned or else the document is null and void.  

Negotiable instrument is an effective way of payment of money and also acts as a guarantee all by itself. It is very popular and is commonly used because it itself acts as an evidence in case the payer fails to pay the money. It acts like a contract.

It ensures that the payer will pay the money. The Negotiable Instruments Act, 1881, talks about only three instruments – promissory notes, bills of exchange and cheque but it does not exclude the possibility of adding any other instrument which satisfies the following two conditions of negotiability:  

  • The instrument should be freely transferable (by delivery or by endorsement. and delivery) by the custom of the trade and  
  • The person who obtains it in good faith and for value should get it free from all defects, and be entitled to recover the money of the instrument in his own name. 

Filed Under: Essay

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Primary Sidebar

Search for Essay

Top Engineering Exams in India

  1. JEE Main

Get Benefits in Click

Best Scholarship for Students

  1. Scholarship 2022
  2. Apj Abdul Kalam Scholarship 2022
  3. Ashirwad Scholarship 2022
  4. Bihar Scholarship 2022
  5. Canara Bank Scholarship 2022
  6. Colgate Scholarship 2022
  7. Dr Ambedkar Scholarship 2022
  8. E District Scholarship 2022
  9. Epass Karnataka Scholarship 2022
  10. Fair And Lovely Scholarship 2022
  11. Floridas John Mckay Scholarship 2022
  12. Inspire Scholarship 2022
  13. Jio Scholarship 2022
  14. Karnataka Minority Scholarship 2022
  15. Lic Scholarship 2022
  16. Maulana Azad Scholarship 2022
  17. Medhavi Scholarship 2022
  18. Minority Scholarship 2022
  19. Moma Scholarship 2022
  20. Mp Scholarship 2022
  21. Muslim Minority Scholarship 2022
  22. Nsp Scholarship 2022
  23. Oasis Scholarship 2022
  24. Obc Scholarship 2022
  25. Odisha Scholarship 2022
  26. Pfms Scholarship 2022
  27. Post Matric Scholarship 2022
  28. Pre Matric Scholarship 2022
  29. Prerana Scholarship 2022
  30. Prime Minister Scholarship 2022
  31. Rajasthan Scholarship 2022
  32. Santoor Scholarship 2022
  33. Sitaram Jindal Scholarship 2022
  34. Ssp Scholarship 2022
  35. Swami Vivekananda Scholarship 2022
  36. Ts Epass Scholarship 2022
  37. Up Scholarship 2022
  38. Vidhyasaarathi Scholarship 2022
  39. Wbmdfc Scholarship 2022
  40. West Bengal Minority Scholarship 2022

Advertisement

Students Big Search Today

  1. Speech about Family
  2. Women Safety Essay
  3. Autobiography of a Pen
  4. About Haritha Haram
  5. Mahatma Gandhi Essay
  6. Clayton Rule
  7. My Favourite Cartoon
  8. Clayton Rule
  9. Importance of Trees Essay
  10. Directive Principles of State Policy
  11. My Favourite Teacher
  12. Speech About Family
  13. My Father Essay
  14. Honesty is the Best Policy Essay
  15. my favourite book

Footer

Top Trending Essays in March 2021

  1. Essay on Pollution
  2. Essay on my School
  3. Summer Season
  4. My favourite teacher
  5. World heritage day quotes
  6. my family speech
  7. importance of trees essay
  8. autobiography of a pen
  9. honesty is the best policy essay
  10. essay on building a great india
  11. my favourite book essay
  12. essay on caa
  13. my favourite player
  14. autobiography of a river
  15. farewell speech for class 10 by class 9
  16. essay my favourite teacher 200 words
  17. internet influence on kids essay
  18. my favourite cartoon character

Brilliantly

SAFE!

studytoday.net

Content & Links

Verified by Sur.ly

2022

Essay for Students

  • Essay for Class 1 to 5 Students

Scholarships for Students

  1. Class 1 Students Scholarship
  2. Class 2 Students Scholarship
  3. Class 3 Students Scholarship
  4. Class 4 Students Scholarship
  5. Class 5 students Scholarship
  6. Class 6 Students Scholarship
  7. Class 7 students Scholarship
  8. Class 8 Students Scholarship
  9. Class 9 Students Scholarship
  10. Class 10 Students Scholarship
  11. Class 11 Students Scholarship
  12. Class 12 Students Scholarship
  13. Class 11 Students Scholarship
  14. Class 12 Students Scholarship

STAY CONNECTED

  • Facebook
  • Instagram
  • Pinterest
  • Twitter

Resources

  • About Study Today
  • Contact Us
  • Privacy Policy
  • Terms & Conditions

Scholarships

  1. Apj Abdul Kalam Scholarship
  2. Ashirwad Scholarship
  3. Bihar Scholarship
  4. Canara Bank Scholarship
  5. Colgate Scholarship
  6. Dr Ambedkar Scholarship
  7. E District Scholarship
  8. Epass Karnataka Scholarship
  9. Fair And Lovely Scholarship
  10. Floridas John Mckay Scholarship
  11. Inspire Scholarship
  12. Jio Scholarship
  13. Karnataka Minority Scholarship
  14. Lic Scholarship
  15. Maulana Azad Scholarship
  16. Medhavi Scholarship
  17. Minority Scholarship
  18. Moma Scholarship
  19. Mp Scholarship
  20. Muslim Minority Scholarship
  21. Nsp Scholarship
  22. Oasis Scholarship
  23. Obc Scholarship
  24. Odisha Scholarship
  25. Pfms Scholarship
  26. Post Matric Scholarship
  27. Pre Matric Scholarship
  28. Prerana Scholarship
  29. Prime Minister Scholarship
  30. Rajasthan Scholarship
  31. Santoor Scholarship
  32. Sitaram Jindal Scholarship
  33. Ssp Scholarship
  34. Swami Vivekananda Scholarship
  35. Ts Epass Scholarship
  36. Up Scholarship
  37. Vidhyasaarathi Scholarship
  38. Wbmdfc Scholarship
  39. West Bengal Minority Scholarship

All Rights Reserved Copyrights @ 2020 StudyToday.net