Negotiable Instruments

Act
Meaning of Negotiable Instrument- An
instrument is legally recognized written
document, whereby rights are created on the
part of another. The world negotiable means
transferable from one person to another either
by mere delivery or by endorsement.
 Elements of Negotiable
Instrument
1-It must be in writing which includes typing
,computer printout or engraving
2-The instrument must be signed by the person who
is the maker.
3-There must be an unconditional promise.
4- The instrument must be involve payment of
certain sum of money.
5-The instrument must be payable at a time which
is certain to arrive.
6-In case of a bill or cheque ,the drawee must be
named.
 Promissory Note

A promissory note is an instrument in

writing containing an unconditional
undertaking signed by the maker to
pay a certain amount of money to a
certain person.
 Bill of Exchange

A bill of exchange is defined in sec 5 as

‘ an instrument in writing ,containing
an unconditional order, signed by the
maker, directing a certain person to
pay a certain money to a certain
parson.
* A promisory note as well as a bill of
exchange are liable to stamp duty.