Question

What do you mean by negotiable instruments? explain three types?

Answer 1

In day-to-day banking, a negotiable instrument usually refers to checks, drafts, bills of exchange, and some types of promissory notes. 3. ... Checks Legaldefinition:(S 6) “A" cheque" is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand”.

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Answer 2

A Negotiable Instrument is that document that includes a ‘promise to pay’ a certain amount of money to the bearer of the document. Its a mode of transferring a debt from one person to another. Negotiable Instruments are always in written form.

 

Examples of Negotiable instruments are- a cheque, a promissory note, a bill of exchange

DEFINITION OF A NEGOTIABLE INSTRUMENT

Documents of a certain type which are used in commercial transactions and monetary dealings, are known Negotiable instruments.

“Negotiable” means transferable by delivery and

“instrument” means a written document by which a right is created in favor of some person.  Thus, negotiable instrument means a document which is transferable by delivery.

According to Section 13(i) of negotiable instrument Act, 1881 a negotiable instrument includes and means a promissory note, bill of exchange or cheque.