Dishonour and Discharge of Negotiable Instruments
After carefully reading this chapter, you will be able:
- Understand the meaning of dishonour and discharge of negotiable instruments.
- Enumerate the different types of dishonour.
- Explain what is meant by notice of dishonour.
- Understand the meaning of noting and protesting.
- Explain how a party to an instrument is discharged.
A negotiable instrument is dishonoured in two ways:
- By non-acceptance
- By non-payment
As a bill of exchange only needs acceptance, it may be dishonoured by non-acceptance. A promissory note, a cheque and a bill may be dishonoured by non-payment. It is the duty of the holder, in case his instrument is dishonoured, to give notice of dishonour to all prior ...