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Negotiable Instrument (Types (Bills of Exchange (primarily international…
Negotiable Instrument
Types
Bills of Exchange
- primarily international trade
- written orders - specific sum - specific date in future
- inland bill - both parties are residents in Malaysia; drawn and payable in Malaysia
- foreign bill - not inland bill
Unconditional Order
- form of "order"
- no conditions
- order to pay - must not order any act to be done in addition to receiving money
In writing
- printing, photography, anything in visible form
- any language, even Arabic
-
Cheque
Def & Characteristics:
- unconditional order in writing
- addressed to bank
- signed by drawer
- order bank to pay sum of money to cheque holder
Parties
Drawer, Drawee, Payee, Collecting Bank
Condition
- Overdue Cheque - in circulation for unreasonable time
- Stale cheque - after 6 months in circulation
- Undated cheque - bank x need honour;
holder allow to fill correct date within reasonable time for it to be honoured
- Post-dated cheque - valid but B wont pay before due date
B will return and service charge RM 10
- Forged cheque - signature false or altered; on the face or back of bill
Crossing of Cheques
-
-
-
Not Negotiable - can transfer, not nego
Material Alteration on Cheque - cannot debit
-
Def
- contract - create legal obligation to pay money
- possess attributes of negotiability
Elements:
- doc evidences contractual obligation to pay $
- can be transferred from one person to another
- person receiving it (transferee) will get right to ownership
- transferee received in good faith and value - receive the title
- not affected by transferor defects
- transferee can sue in his own name
- no need give original debtor notice of transfer