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INSTRUMENTS
OBJECTIVE
To provide the candidate with a broad
understanding of the following principles
pertaining
to Negotiable Instruments;
Nature and characteristics.
Negotiability and transferability.
Types: Cheques, promissory notes, bills of exchange.
Rights and obligations of the parties.
INTRODUCTION
This chapter endeavors to explain
what negotiable instruments are and
gives examples of them.
It also gives the rights and duties of
the various instrument holders.
KEY DEFINITIONS
Unconditional: -Absolute where no conditions are attached as to
payment
Drawer: - the person who draws the bill demanding payment
Drawee: - the person to whom the bill is draw
Discounting: - receipt of the amount of the bill from a bank or
fiancial institution less
the discount for the unexpired duration
Endorsement: - This is the signing or executing a bill by a party for
the purpose of
negotiating it to another
Dishonour - Failure to honour a bill of exchange
Notaries Public An advocate, who attests or certifis deeds and
other documents
and notes or protests dishonoured bills of exchange.
Cheque - A bill of exchange drawn on a banker payable on demand.
12.1 NEGOTIABLE INSTRUMENTS