COMMERCE 4SD3 Chapter Notes - Chapter 21: Promissory Note, Negotiable Instrument, Cheque
13 Jan 2017
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Bill of exchange act governs three types of negotiables: bills of exchange, cheques, promissory notes. Conditional discharge: the debtor is discharged under the original contract only if the negotiable instrument given in payment is honoured. Promissory note: a written promise to pay a specified sum of money to another party at a fixed or determinable future time or on demand. Maker: the party who signs and delivers a promissory note. The holder of a promissory note that has been endorsed has the right to payment. Cheque: a bill of exchange drawn against a bank and payable on demand. Implied promise that payee has enough funds to satisfy the cheque. Until an instrument is delivered and signed liability to pay doesn"t exist. Negotiability: the special quality possessed by negotiable instruments as a distinct class of assignable contracts. To transfer the negotiable instruments the holder must sign and deliver to the new holder.
