LAW 603 Chapter Notes - Chapter 14: Demand Draft, Oral Contract, No Authority
22 Jul 2016
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Law603 chapter 14 notes special contracts: negotiable instruments. Dealing with a cheque (a cheque is a negotiable instrument) Cash is easy to use, but it is bulky and can get lost/stolen. Negotiable instruments: consists of a contract that contains an obligation to pay money (ex: cheque is a type of contract) A negotiable instrument represents a compromise between a simple contract and money. Negotiable means that it is transferrable from one party to another in a way that may remove any defects. Negotiable instruments carry the risk of non-performance. The intention was to increase economic efficiency by providing business people with a comprehensive set of rules regarding non-monetary payments. The bills of exchange act is much less flexible than the sale of goods act. A sale of goods normally involves only 2 parties while a negotiable instrument can be transferred amongst many people.
