Legal Aspects Assignment 1
Q.5. a).A endorsed a cheque in blank in favour of B who becomes its holder. Henegotiates it in favour of C and C transferred this to D without endorsement. In theevent of dishonor, explain the position of D.
A is the drawer of the cheque (account holder)B is the payee and holder. Since B negotiates in favour of C..C is also holder in due course. Since C has transferred this without endorsement D is notholder in due course.In the event of dishonour of cheque, D cannot claim from A, B, or C. b) A is holder of a cheque who endorses sans recourse to B and B to C and C toD who endorses to E. Cheque is dishonored. Explain the position of E as holder indue course and mention the parties against whom he can claim the money.
A is the holder. A endorses without any recourse or liability to B.The cheque is transferred from B to C. From C to D. From D with endorsement to E.E can claim the money from D, C, or B since they have transferred without condition.They have transferred without saying sans recourse. E or D or C or B cannot claimmoney from A.
Legal Aspects Assignment 2
Q.2. X issues a cheque in favour of Y and puts a condition that the payment is to bemade only when Y fulfills a condition. Y obtains the payment from the bank withoutcompliance of this condition. X demands damages from the bank for not ensuring thecompliance. What is conditional endorsement and how is it effective between the parties mentioned above?
When drawer/holder of cheque puts a condition while endorsing in favour of other personor persons, that the endorsee should fulfill a condition mentioned in order to get the payment of the cheque. If condition is not fulfilled the endorsee is not entitled for payment of cheque. Such endorsement is conditional endorsement.In the example given above,X is the account holder/drawer of cheque.Y is a conditional holder, has to fulfill the condition in order to get payment.Y will become holder in due course if he fulfills the condition.Hence bank who has made payment to Y, without complying or not ensuring complianceof condition by Y, has to pay damages or compensates to X. Bank in turn canclaim/recover amount of cheque from Y.