Negotiable Instrument

NEGOTIABLE INSTRUMENT
QUESTION 1 A bill of exchange is defined as an unconditional order in writing, addresses to another, signed by the person giving it, requiring the person whom it is addressed to pay on demand or at a fixed or determinable future time a sum certain in money to, or to the order of a specified person, or to bearer. One of the characteristics of the bill of exchange is an unconditional in writing: order and not request. The example of Conditional situation are, given discretion to pay or not to pay, asked an act to be done and holder signed receipt of payment. In case of Palmer v Pratt, the order to pay was made within 30 days after the ship reached Calcutta was held to be a conditional order. Second one is addressed by one person to another. According to the Section 6(1) BEA, a drawee must be named or otherwise indicated in a bill with reasonable certainty. The drawee must be named or the bill is considered to be paid to the bearer. Thirdly, signed by the person giving it. A bill must be signed by the drawer or authorised agent (Section 96(1) BEA). Rubber stamp is accepted provided it is affixed with the intention of being the drawer’s signature. Fourth is to pay on demand. According to the Section 10(1) BEA: a bill is payable in demand. Next one is a sum certain in money. According to the Section 9 BEA, bill of exchange must be paid in the form of money and not service. It may be payable in the following manners. They are interest, installments and according to specified rate of exchange. Last one is at a fixed or determinable future time. According to the Section 3(4)(a) BEA, a bill is not invalid by reason that it is not dated and the Section 12 BEA, the holder may insert date.