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1 PN

PROMISSORY NOTE (PN)

- Preparation/Signing
- Issuance (pay to order)
- Consideration
Value, presumed prima facie (Secs. 24,25,26)
Lack of consideration – personal defense (Sec. 28)
- Liability/Warranties of the Maker (Sec. 60)
- Negotiation (indorsement + delivery)
- Accumulation of secondary contracts (Indorsements/nego)
- Kinds of Indorsements
- Liabilities of General Indorsers (Sec. 66)
- Liabilities of other kinds of indorsers (Secs.
36,38,39,44)
- Presentment for Payment
- When necessary (Sec. 70)
- When to be made (Sec. 71)
- What constitutes sufficient presentment (Sec. 72)
- If paid by maker – instrument is discharged.
- Payment in due course, etc.(Secs.
119,120,122)
- If dishonored by non-payment
- Notice of Dishonor, NOT necessary, if
waived or dispensed with (Secs. 109, 112)
- Not Waived
-- To whom (Sec. 97)
-- By whom (Sec. 90)
-- Sufficiency & Form of Notice (Sec.
95, 96)
-- Effects of failure to give notice of
dishonor
-Must be given within
prescribed time.
-If not, discharged as
against those without
notice. EXCEPT:
(Secs. 109,112,114,115,116,117)
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2PN

PROMISSORY NOTE (PN)

- Preparation/Signing
- Issuance (pay to bearer)
-Consideration
Value, presumed prima facie
(Secs. 24,25,26)
- Negotiation (delivery)
- Accumulation of secondary contracts; (negotiations/delivery)
-If specially indorsed (Sec. 40)
-Liability of person negotiating by delivery same as
qualified indorser (Sec. 38)
- Presentment for Payment
-When necessary (Sec. 70)
-When to be made (Sec. 71)
-What constitutes sufficient presentment (Sec. 72)
-If paid by maker – instrument is discharged.
-Payment in due course, etc. (Secs.
119,120,122)
- If dishonored by non-payment
- Notice of Dishonor, NOT necessary, if
waived or dispensed with (Secs. 109, 112)
- Not Waived
-- To whom (Sec. 97)
-- By whom (Sec. 90)
-- Sufficiency & Form of Notice (Sec.
95, 96)
-- Effects of failure to give notice of
dishonor
-Must be given within
prescribed time.
-If not, discharged as
against those without
notice. EXCEPT:
(Secs. 109,112,114,115,116,117)

NOTE: In bearer instruments, in the event of a dishonor made by

the maker, the holder may go after the immediate transferor
only, who negotiated the note to him by delivery. (Sec. 65).
Except: If the immediate transferor took the instrument from a
prior indorser by special indorsement and negotiated the same to
the holder also by special indorsement; the holder may go after
the immediate transferor or the prior indorser. (Sec. 40).
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3B/E

BILL OF EXCHANGE (B/E)

- Preparation/Signing
- Issuance (pay to order)
-->Consideration
-->Value, presumed prima facie (Secs. 24, 25, 26)
-->Lack of consideration – personal defense
(Sec. 28)
-->Liability/Warranties of a Drawee/Acceptor (Sec. 62)
- Negotiation (indorsement + delivery)
- Accumulation of secondary contracts (Indorsements)
-->Kinds of indorsements
-->Liabilities of General Indorsers (Sec. 66)
-->Liabilities of other kinds of indorsers (Secs. 36, 38,
39, 44)
- Presentment for Acceptance
-When made (Secs. 143, 146)
-How made (Sec. 145)
-Purpose of presentment for acceptance
(Secs. 143,144)
-Accepted – Accumulation of secondary contracts
(indorsements/nego)
-Acceptance, how made (Sec. 132,133,134,135)
-When made (Sec. 136)
-Kinds of Acceptance (Sec. 139, 161)

-Dishonored by Non-acceptance
(Sec. 149,150,151,132,133) – Further negotiation
still possible.
-Protest for Non-acceptance - for certain bills only
-When necessary (Sec. 152)
-When dispensed with (Sec. 159)
-How made (Sec. 153)
-By whom (Sec. 154)
-When made (Sec. 155)

-Presentment for Payment

-Purpose, effect (Sec. 70)
-When sufficient (Sec. 72)
-Place of presentment (Sec. 73)
-When made – Demand or After Sight (Sec. 71)
-Payment – Discharged (Sec. 119)
-Dishonor by Non-payment (similar rules)
 Page | 4

-Protest for Non-payment –for certain bills only;

similar rules.

4B/E

BILL OF EXCHANGE (B/E)

- Preparation/Signing
- Issuance (pay to bearer)
-->Consideration
->Value, presumed prima facie (Secs. 24,25,26)
->Lack of consideration – personal defense
(Sec. 28)
-->Liability/Warranties of a Drawee/Acceptor (Sec. 62)
- Negotiation (delivery)
- Accumulation of secondary contracts (Nego)
-->Kinds of Indorsements
-->Liabilities of General Indorsers (Sec. 66)
-->Liabilities of other kinds of indorsers
(Secs. 36,38,39,44)
-->If specially indorsed (Sec. 40)
-->Liability of person negotiating by delivery same as
qualified indorser (Sec. 38)
- Presentment for Acceptance
-When made (Secs. 143, 146)
-How made (Sec. 145)
-Purpose of presentment for acceptance
(Secs. 143,144)
-Accepted – Accumulation of secondary contracts
(Negotiations)
-Acceptance, how made (Sec. 132,133,134,135)
-When made (Sec. 136)
-Kinds of Acceptance (Sec. 139, 161)

-Dishonored by Non-acceptance
(Sec. 149,150,151,132,133) – Further negotiation
still possible.
-Protest for Non-acceptance - for certain bills only
-When necessary (Sec. 152)
-When dispensed with (Sec. 159)
-How made (Sec. 153)
-By whom (Sec. 154)
-When made (Sec. 155)
 Page | 5

-Presentment for Payment

-Purpose, effect (Sec. 70)
-When sufficient (Sec. 72)
-Place of presentment (Sec. 73)
-When made – Demand or After Sight (Sec. 71)
-Payment – Discharged (Sec. 119)
-Dishonor by Non-payment (similar rules)
-Protest for Non-payment –for certain bills only;
similar rules.

NOTE: In bearer instruments, in the event of a dishonor made by the

drawee or acceptor, the holder may go after the immediate transferor only,
who negotiated the note to him by delivery. (Sec. 65).
Except: If the immediate transferor took the instrument from a prior
indorser by special indorsement + delivery and negotiated the same to the
holder also by indorsement + delivery. In such a situation, the holder may
go after the immediate transferor or the prior indorser. (Sec. 40).