y NUR HIKMAH EDI (DIAWEF09070006) y FARAH NADZIRAH MOHD AZNOOR (DIAWEF09070004
DEFINATION OF NEGOTIABLE INSTRUMENTS
=negotible instruments are a class of document used in commercial and financial transaction =It is a form of transfer of property (owership) from one person to another in a document evidencing a contractual obligation to pray money. Section 13 Act 1949. Consent . Two or more person are said to consent when they agree upon the same thing in the same sense.
CHARACTERISTIC OF NEGOTIABLE INSTRUMENTS.
(1) FREE TRANSFERABILITY: A negotiable instrument may be transferred by delivery if it is a bearer instrument or by endorsement and delivery if it is an instrument payable to order. (2) TITLE TO TRANSFEREE: The transferee, who takes the instrument bona fide and for valuable consideration, obtains a good title despite any defects in the title of the transferor. (3) ENTITLEMENT TO SUE : The holder can sue in his own name. (4) CONSIDERATION : That every negotiable instrument is made or drawn for a consideration. Thus, this need not necessarily be mentioned
EXAMPLES OF NEGOTIABLE INSTRUMENTS.
BILL OF EXCHANGE > Is a form a written promise that the person who takes. The bill will be paid the amount state in the bill when he presents it at the proper place & time. CHEQUE > Is a bill of exchange drawn on a banker payable on demand . PROMISSORY NOTE > Is a documents which contain a promise by a maker that he will pay a certain some of money. BANKER S DRAFT > Are issued by a bank to customers of good standing on request and agains payment by the customer TRESURY BILL > Is a promissory note issued by the government to raise short term loan. SHARE WARRANT > Where share in a public company are fully paid up . The company may issue a warrant where the bearer is entitled to the shares. DIVIDEN WARRANT > Refer to the profit. DEBENTURE > Loan agreement TRAVELERS CHEQUE > Is a cheque that enable the holder to draw cash on it.
CHARACTERISTICS OF BILL EXCHANGES
(1) IT MUST BE IN WRITING : The Bill of Exchange must be in writing. (2) ORDER TO PAY : There must be an order to pay. It is of the essence of the bill that its drawer orders the drawee to pay money to the payee. (3) UNCONDITIONAL ORDER : This order must be unconditional, as the bill is payable at all events (4) SIGNATURE OF THE DRAWER : The drawee must sign the instrument. (5) DRAWEE : A bill, in order to be perfect, must indicate a drawee who should be called upon to accept or pay it. (6) PARTIES : The parties to a bill are to be specified in the instrument with reasonable certainty. (7) CERTAINTY OF AMOUNT : The sum must be certain. (8) PAYMENT IN KIND IS NOT VALID : The medium of payment must be money and money only. (9) STAMPING : A Bill of Exchange, to be valid, must be duly stamped. (10) CANNOT BE MADE PAYABLE TO BEARER ON DEMAND : A Bill of Exchange as originally drawn cannot be made payable to the bearer on demand.