LAW 603 Chapter Notes - Chapter 14: Negotiable Instrument, Promissory Note, Cheque
30 Oct 2017
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Consists of a contract that contains an obligation to pay money: e. g. , cheques, promissory notes, bills of exchange. Negotiable instrument: unique form of contract: negotiable instrument. Conceptually somewhere between a contract and money: like a contract. An obligation by one party to another party to pay money: not like a contract. Example: rory agrees to purchase a car from joan for ,000, they sign a contract for the purchase of the car, and rory issues a cheque to joan for. ,000: the consideration provided by rory in the contract is the promise to pay joan ,000 and is the same consideration contained in rory"s cheque issued to joan. If the cheque is not honoured by the bank, joan can sue rory for payment on either transaction. The sale contract or the cheque itself (second option is easier to prove) Many of the rules that normally govern contracts do not apply in the same way to negotiable instruments.
