21

Meaning and Types of Negotiable Instruments

CHAPTER OBJECTIVES

After carefully reading this chapter, you will be able:

  • Understand the meaning and characteristics of negotiable instruments.
  • Enumerate the meaning and essential elements of a promissory note, a bill of exchange and a cheque.
  • Distinguish between a promissory note and a bill of exchange; a bill of exchange and a cheque.
  • Get a clear idea about crossing of a cheque and different types of crossing a cheque.
  • Describe the different types of negotiable instruments.

The law relating to negotiable instruments is contained in the Negotiable Instruments Act 1881. It extends to the whole of India except the state of Jammu and Kashmir.

MEANING OF NEGOTIABLE INSTRUMENTS

Negotiable means ...

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