Meaning and Feature of negotiable instrument, bills of payment, and cheque

Negotiable Instruments

A negotiable instrument is one that can be delivered for exchange or transfer. A written document is a "instrument." The phrases "negotiable" and "instruments" are combined to form the term "negotiable instrument." It is a piece of paper that may be lawfully exchanged from one person to another in exchange for cash; it can be used just like cash. Checks, promissory notes, and bills of exchange are included.

Features/Nature/ Characteristics of Negotiable Instruments:

• Negotiable
• Formal document that is written
• Endorsed by the maker or issuer
• Unconditional order promise
• Amount fixed payable to the order or the barrier
• Payable immediately or at a specific time
• Date and the Negotiability Controlling Words
• Nature (should be free) (should be free)
• A priori assumptions about the holder (holder in due course)
• Title(ownership): Holder eventually receives a better title
• Popularity
• The right to sue
• In place of money

Promissory Note

It is the most straightforward type of paper that makes a payment commitment. It is a written contract that is unconditionally signed in which one party promises to pay another party money at a later date or upon demand. The person who makes the promise to pay is referred to as the promissory maker, and the party to whom the promise to pay is made is referred to as the payee or holder of the promissory. A promissory note that has the maker's signature is a negotiable document. It provides a promise to pay a particular amount to the order of a named party or to the bearer, whichever presents the note. A promissory note may be due either on demand or at a predetermined date.

A discount occurs when a promissory note is sold for a sum that is less than its face value. Examples of such notes include corporate bonds and retail installment loans. The notes may then be repaid in full on the day of maturity or in part before that date for an amount less than their face value.

Essentials of Promissory Notes

• Written record
• Unqualified commitment
• A formal commitment to pay
• A natural signature
• Definite or certain maker
• Promise to pay a specific amount
• I'll only promise to pay cash
• Specific payee
• Stamp (if necessary) (if necessary)

Bills of Exchange

Bills of exchange are unqualified demands in writing that are duly signed and directed to a specific person. They require that person to pay a specific amount of money to the designated person or to the holder of the instrument immediately upon demand.

In a bill of exchange transaction, the following three parties are involved:

• Drawee. This party pays the payee the sum shown on the bill of exchange.
• Drawer. This party demands payment from the drawee to a third party (or the drawer can be paid by the drawee).
• Payee. The drawee pays this party the sum specified on the bill of exchange.

Essential Element of Bills of Exchange

• Written record
• Order in writing to pay
• Unqualified order
• The drawer's signature
• To make a payment
• Specific payee
• Stamp

Cheque

A bill of exchange that is drawn on a banker is a form of check. It is a negotiable document issued in any bank's name that commands the payment of the specified amount upon demand. The check is a written document that is drawn on a specific bank to pay the stated amount of money. A check is a bill of exchange that is drawn on a banker to pay on demand, as defined by the Negotiable Instruments Act. Cheque is defined as "a bill of exchange drawn on any bank directing it to make payment on demand," by Nepal Rashtra Bank. As a result, a check that is payable on demand is always drawn from the bank. The Drawer, Drawee, and Payee are the three parties that make up a cheque. The many check kinds include:

• Bearer Cheque
  • A check is referred to as a bearer cheque if the terms "or bearer" that are presented on its face are not removed. It is a check that can be cashed by the person named on it or by anyone else who brings it to the bank to be cashed. These checks are hazardous because, in the event that one is misplaced, the finder may obtain reimbursement from the bank.
• Anti-Dated Cheque
  • A check is referred to as a "anti-dated cheque" if its date is earlier than the date it is presented to the bank. A check of this type is good for three months after the check's date.
• Stale Cheque
  • A check is considered stale if it is presented for payment more than three months after the check's date. A stale cheque is not reputed by the bank.
• Crossed Cheque
  • A cheque is crossed when two parallel lines are drawn across its face, either with or without the inclusion of text such as "& CO.", "Account Payee," or "Not Negotiable." A crossed check can only be credited to the payee's account; it cannot be cashed at the bank's cashier counter.
• Order Cheque
  • Order checks are those that have "or order" printed on the face in place of the word "carrier," which was previously present on the face of the check. This kind of check is made out to the person listed as the payee or anyone else who is endorsed on it (transferred).
• Uncrossed / Open Cheque
  • An "uncrossed cheque" or "open cheque" is a check that has not been crossed. You can get the money to pay such a check at the bank's counter. A bearer check or an order check both qualify as open checks.
• Post-Dated Cheque
  • A check is referred to as post-dated if it has a date that is still in the future. A check is post-dated if a future date is specified on it. This kind of check cannot be honored before the date printed on it.

Essential Element of Cheque

• Written record
• Order in writing to pay
• Unqualified order
• Maker's signature
• Drew a banker out
• Specific payee
• To be paid to obstacles
• Stamp
• Payee to obstacles
• Post-dated or dated

Holder

The individual who is entitled to receive the sum specified in the instrument is the holder. a person who is entitled to receive the money and have authority over the negotiable instrument.

• Condition
  • Entitled to possession
  • Entitled to receive or recover the amount
• Holder in Due Course
  • Any individual who becomes the processor of an instrument as a consideration, including the holder who accepts the negotiable instrument for consideration, benefits.
• Condition
  • He or she has donated an item for thoughtful consideration.
  • He or she has obtained an instrument before it has reached maturity.
  • He or she who has genuinely taken possession of an instrument.
  • The tool should be legitimate.
  • He or she must hold a valid license.
• Discharge of Negotiable Instrument
  • With payment
  • By primary responsible parties taking ownership
  • By general contracting act
  • Via unauthorized material modification
  • By passing time
  • Through rejection or renunciation
  • Through cancellation.
  • By deceptive action.

Reference

Akrani, G. (2011, 09 2).kalyan-city. Retrieved from http://kalyan-city.blogspot.com/:http://kalyan-city.blogspot.com/2011/02/what-is-cheque-definition-kinds-and.html

Bragg, S. (2011).accountingtools. Retrieved from www.accountingtools.com: http://www.accountingtools.com/questions-and-answers/what-is-a-bill-of-exchange.html

Collins Dictionary of Law © W.J. Stewart, 2006

Ghai, K. (n.d.).yourarticlelibrary. Retrieved fromhttp://www.yourarticlelibrary.com/essay/law-essay/law-meaning-features-sources-and-types-of-law/40363/

Law, E. o. (2008).thefreedictionary. Retrieved from thefreedictionary.com:http://legal-dictionary.thefreedictionary.com/promissory+note

Shrestha, R. P. (2007).Business Law.Kathmandu: M.K.Books.