GUIDE QUESTIONS

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What are the reasons why negotiable instruments play an important

role in trade and commerce?
In what sense is a negotiable instrument analogous to money?
An important feature of a negotiable instrument is the accumulation of
secondary contracts as it is transferred from one person to another.
Explain how this is so.
In case there is a doubt as to the negotiability of an instrument, should
it be held negotiable or non-negotiable?
Are the following negotiable instruments?
1. letter of credit
2. treasury warrant
3. postal money order
4. bill of lading
5. certificate of stock
6. warehouse receipt
Enumerate the requirements as to form and content of an instrument in
order that it will be negotiable under the law.
The drawee of a bill of exchange: dishonors or refuses to pay it. Will he
be liable (a) to the payee; (b) to the drawer?
Is ante-dating or post-dating an instrument illegal?
What is the effect of the insertion of a wrong date in an undated
instrument by the holder: (a) as to him? (b) with respect to a holder in
due course?
May a person be held liable on an instrument although his signature
does not appear thereon?
In case of forged instruments, who are not allowed by law to set up the
defense of forgery, and are, therefore, made liable to the holder?
When is a promise of order to pay unconditional? Give examples of
terms appearing in an instrument which will not make the promise or
order conditional.
Suppose an instrument contains a promise or order to do in act in
addition to the payment of money, will it render the instrument nonnegotiable?
When is an instruments payable to bearer? Why is an instrument
payable fictitious person treated as a bearer instrument?
Who are the original parties to a: (a) promissory note? (b) bill of
exchange?

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Q.
R.
S.
T.

Is the sum payable certain although the instrument is to be paid with

costs incurred in collecting the same plus attorneys fees?
Will doing of an act in addition to the payment of money, make an
instrument non-negotiable?
When is an instrument payable to order? To whose order may an
instrument to be made payable?
Give the requisites in order that an agent who signs a negotiable
instrument on behalf of a principal may not be held personally liable to
the payee or holder.
Know the following:
a. Section 1 of NIL (by heart!)
b. negotiable promissory note
c. negotiable bill of exchange
d. legal tender
e. procuration
f. non-negotiable instrument
g. fictitious person
h. immediate parties
i. remote parties.