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The document discusses negotiable instruments, specifically focusing on cheques and their types, including bearer, order, and crossed cheques. It also covers the concept of endorsement, which allows the transfer of rights through signature, and the dishonor of cheques, detailing reasons, consequences, and safeguards. The information is grounded in the Negotiable Instruments Act of 1881.

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2 views4 pages

Open Negotiable-Instruments-Understanding-the-Basics_(1)[1]

The document discusses negotiable instruments, specifically focusing on cheques and their types, including bearer, order, and crossed cheques. It also covers the concept of endorsement, which allows the transfer of rights through signature, and the dishonor of cheques, detailing reasons, consequences, and safeguards. The information is grounded in the Negotiable Instruments Act of 1881.

Uploaded by

messironldo77
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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DEV BHOOMI

UTTARAKHAND
UNIVERSITY
ASSIGNMENT
BUSINESS LAW

SUBMITTED BY: AJAY BISHT SUBMITTED TO: Mrs. SUBHI SINGH


ROHIT CHAUHAN
ASHISH RAWAT
SAKSHI RAWAT
MAYA

Topic :
• Negotiable Instrument ( Types )
• Cheque ( Types )
• Endorsement( Dishonor of Cheque )
Negotiable Instruments:
Understanding the Basics

• It is a signed document that promises a payment to a


specified person or assignee.
• They are transferable from one person to another
• It is always a written document
• It came into force on 1 march 1881
.

• Types of N.I.

Cheques: A Popular Type of Negotiable


Instrument
Cheques are widely used negotiable instruments that provide a convenient means of payment.

1 Payee

The person or entity to whom the cheque is payable.

2 Drawer

The party who issues the cheque and signs it.

3 Drawee

The bank or financial institution upon which the cheque is drawn.


Types of Cheques
Bearer Cheque

Pays the specified amount to whoever presents the cheque.

Order Cheque

Pays the specified amount to the person or entity named on the cheque.

Crossed Cheque

A crossed cheque is a cheque that has been marked specifying an instruction on the way it is
to be redeemed

Endorsement: The Power of Signature


Endorsement is the act of signing a cheque to transfer rights to a third party or to a specified
account.

1 It is the act of signing a check with the process of transmitting it to somebody


else

2 The Endorsement was stated in section 15 of the negotiable


instrument act 1881
Dishonour of Cheque: Consequences and
Safeguards
When a cheque is dishonoured, it means that the bank cannot or will not honor the payment.

1 Reasons for Dishonour

Inadequate funds, signature mismatch, or expiration of cheque are common causes.

2 Consequences

Legal implications, loss of credibility, and potential financial penalties for the drawer.

3 Safeguards

Best practices for maintaining sufficient funds and vigilance in signing and issuing cheques.

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