Negotiable Instruments (Part 1)

<p>It must explicitly state that it's payable to bearer. (D)</p> Signup and view all the answers

<p>Marked 'Account Payee Only'. (C)</p> Signup and view all the answers

<p>Endorsement capacity (D)</p> Signup and view all the answers

<p>Non-negotiable instrument (C)</p> Signup and view all the answers

<p>It encompasses promissory notes, bills of exchange, and cheques. (D)</p> Signup and view all the answers

<p>The ability to transfer the legal rights and obligations of an instrument. (B)</p> Signup and view all the answers

<p>Bearer bonds (C)</p> Signup and view all the answers

<p>To enable easy conversion of credit into cash. (B)</p> Signup and view all the answers

<p>All individuals residing in India, including foreigners. (D)</p> Signup and view all the answers

<p>An instrument which allows buying now and paying later. (A)</p> Signup and view all the answers

<p>It legitimizes credit instruments to avoid the impracticality of carrying cash. (A)</p> Signup and view all the answers

<p>The holder of a negotiable instrument has full legal title to it. (D)</p> Signup and view all the answers

<p>Place of birth of the payer (B)</p> Signup and view all the answers

<p>The transferee may sue without notifying the debtor. (B)</p> Signup and view all the answers

<p>The date on the negotiable instrument is presumed to be accurate. (D)</p> Signup and view all the answers

<p>The holder is presumed to be a holder in due course. (D)</p> Signup and view all the answers

<p>It is presumed that acceptance occurs within a reasonable time after issuance. (C)</p> Signup and view all the answers

<p>The order of endorsements is presumed to be in sequence as they appear. (D)</p> Signup and view all the answers

<p>It is presumed to have been duly stamped. (B)</p> Signup and view all the answers

<p>It is presumed valid under Sections 118 and 119. (A)</p> Signup and view all the answers

<p>The creditor can transfer the right to another person. (C)</p> Signup and view all the answers

<p>All negotiable instruments are also transferable, but not vice versa. (A), Not all transferable instruments are negotiable. (B)</p> Signup and view all the answers

<p>It requires only delivery to the new holder. (D)</p> Signup and view all the answers

<p>The transferee is granted an absolute and good title regardless of the transferor's title. (C)</p> Signup and view all the answers

<p>Endorsement and delivery are necessary. (A)</p> Signup and view all the answers

<p>The right to sue applies even if the title is challenged. (C)</p> Signup and view all the answers

<p>The transferee can still acquire a good title if accepted in good faith. (C)</p> Signup and view all the answers

<p>Ownership can be transferred without any additional documents. (A)</p> Signup and view all the answers

<p>By labeling it as 'Account Payee'. (C)</p> Signup and view all the answers

<p>The payee and an amount (C)</p> Signup and view all the answers

<p>It is not admissible in court. (A)</p> Signup and view all the answers

<p>It ensures the instrument is normally not dishonored. (B)</p> Signup and view all the answers

<p>They acquire a better title than the transferor. (C)</p> Signup and view all the answers

<p>Negotiability allows greater rights to the transferee than held by the transferor. (D)</p> Signup and view all the answers

<p>It must be drawn, signed, and delivered to the recipient. (A)</p> Signup and view all the answers

<p>Payment of required stamp duty and fees. (A)</p> Signup and view all the answers

<p>A must return the laptop to 'C', the rightful owner. (B)</p> Signup and view all the answers

<p>A has a good title and does not need to return it to C. (D)</p> Signup and view all the answers

<p>Only negotiable instruments confer rights against a thief. (D)</p> Signup and view all the answers

<p>The holder possesses an enhanced legal status. (A)</p> Signup and view all the answers

<p>Seek legal advice to clarify their rights. (C)</p> Signup and view all the answers

<p>Prior permission from the author is necessary for any use. (D)</p> Signup and view all the answers

<p>A retains rights as long as they are unaware of the theft. (A)</p> Signup and view all the answers

<p>Negotiable instruments can be transferred to others freely. (B)</p> Signup and view all the answers

<p>A promissory note. (A)</p> Signup and view all the answers

A legal document that allows transfer of rights and responsibilities between parties, usually by delivery or endorsement.

Capable of being transferred from one person to another, providing full legal rights to the new owner.

A legal document that gives rights and responsibilities to someone.

Instruments used to allow buying now and paying later, i.e., borrowing money.

Indian law governing promissory notes, bills of exchange, and checks, applicable to all Indians and foreigners.

A written promise to pay a specific amount of money to a person on a specific date.

A written order to pay a specific amount of money under specific conditions.

A written instruction to a bank to pay a specific amount of money to a person on demand.

Defines a negotiable instrument as a specific document (like a promissory note, bill, or check) that can be transferred.

Instrument payable to anyone holding it; stated on the instrument or blank endorsement required.

Instrument payable to a particular person or their designated representative; except for a check marked "Account Payee Only".

Documents like postal orders and deposit receipts that lack the transferability feature of a negotiable instrument..

Examples of instruments possibly considered negotiable, even though not explicitly listed in Section 13 of the Negotiable Instruments Act.

Characteristics that qualify an instrument as capable of being transferred to a new holder (with legal rights): payable to order/bearer.

An exception to the 'payable to order' rule; this particular type of check cannot be negotiated.

The legal right to sue someone in court to recover a debt.

A legal assumption that something is true unless proved otherwise.

Something of value exchanged for a promise or action in a legal agreement.

The date the negotiable instrument was created.

The time within which a negotiable instrument must be accepted by the drawee.

The time before maturity when a negotiable instrument can be transferred to another person.

The order in which signatures appear on a negotiable instrument, indicating the transfer of ownership.

The ability to easily transfer a financial instrument's ownership from one person to another.

The ease with which ownership of a negotiable instrument can be shifted.

The transferee gets a strong claim to the instrument, even if the original owner had no right to it.

A negotiable instrument that can be transferred by simply handing it over.

A negotiable instrument that requires endorsement (signature) and delivery for transfer.

The ability of the instrument's holder to take legal action related to the instrument.

A complete and unconditional ownership claim.

Acting honestly and without intent to defraud or deceive.

The holder of a negotiable instrument has a right against the person who stole the instrument, even if they acquired it from them.

A legal document that can be transferred from one person to another, providing full legal rights to the new owner.

The holder of the negotiable instrument, even if they received it from the thief.

Someone who acquires a negotiable instrument in good faith and without notice of any defects in the title.

They get a good title to the check and don't have to return it to the original owner.

They have to return it to the original owner.

They have full legal rights to the negotiable instrument and can enforce it against the original owner.

They allow for the smooth transfer of value and financial obligations, facilitating trade and commerce.

The instrument's value is tied to the financial reputation of the person signing it. A reliable signer makes the instrument more trustworthy.

To be valid, a negotiable instrument must be in writing, state a clear promise to pay a specific amount, identify the payee clearly, be signed by the creator, and be properly stamped.

A negotiable instrument that is missing the required stamp is not legally valid, but recent amendments allow for revalidation by paying the stamp duty.

Transferability allows ownership to move, but may not transfer all rights. Negotiability allows FULL rights transfer to the new owner, regardless of the original seller's rights.

If someone buys a stolen laptop, they don't become the true owner. The original owner retains ownership, even if the thief sold it.