PRESENTED TO: NAUMAN QAISER

BY: AMMARA SALEEM BILAWAL SHABBIR AHMED RAZA ZEERAK BATOOL

NEGOCIABLE INSTRUMENTS
A negotiable instrument is a document guaranteeing the payment of a specific amount of money, either on demand, or at a set time. Negotiable instruments are often defined in legislation. A negotiable instrument means a promissory note, bill of exchange or cheque payable either to order or to bearer.

More specifically, it is a document contemplated by a contract, (1) warrants the payment of money, the promise of or order for conveyance of which is unconditional; (2) specifies or describes the payee, who is designated on and memorialized by the instrument; and (3) is capable of change through transfer by valid negotiation of the instrument As a negotiable instrument is a promise of a payment of money, the instrument itself can be used by the holder in due course as a store of value; although, instruments can be transferred for amounts in contractual exchange that are less than the instruments face value (known as discounting)

Freely transferable Absolute title In writing

Unconditional
Certain sum Payee must be a certain person

Signature a must
Certain time Delivery essential

Stamping is mandatory

essentials
Freely transferable Absolute title In writing

Unconditional
Certain sum Payee must be a certain person

Signature a must
Certain time Delivery essential

Stamping is mandatory

Promissory note:
A promissory note is a negotiable instrument, wherein one party (the maker or issuer) makes an unconditional promise in writing to pay a determinate sum of money to the other (the payee), either at a fixed or determinable future time or on demand of the payee, under specific terms. Bank note is frequently referred to as a promissory note: a promissory note made by a bank and payable to bearer on demand

ESSENTIALS OF PROMISSORY NOTE:

In writing, signed, stamped Unconditional promise to pay Money only Certain party

On demand or certain date

Certain sum Parties : drawer, payee

Bill of exchange
An unconditional order issued by a person or business which directs the recipient to pay a fixed sum of money to a third party at a future date. The future date may be either fixed or negotiable. A bill of exchange must be in writing and signed and dated also called draft. A bill of exchange may be endorsed by the payee in favor of a third party, who may in turn endorse it to a fourth, and so on indefinitely. The "holder in due course" may claim the amount of the bill against the drawee and all previous endorsers, regardless of any counterclaims that may have disabled the previous payee or endorser from doing so. This is what is meant by saying that a bill is negotiable.

A bill of exchange or "draft" is a written order by the drawer to the drawee to pay money to the payee. A common type of bill of exchange is the cheque ,defined as a bill of exchange drawn on a banker and payable on demand. Bills of exchange are used primarily in international trade, and are written orders by one person to his bank to pay the bearer a specific sum on a specific date. Prior to the advent of paper currency, bills of exchange were a common means of exchange. They are not used as often today

essentials
Writing, signed, stamped, accepted. Unconditional order to pay Money only Certain party Certain sum parties: drawer, drawee, payee

cheque
A cheque is a document that orders a payment of money from a bank account. The person writing the cheque, the drawer, usually has a current account where their money was previously deposited. The drawer writes the various details including the monetary amount, date, and a payee on the cheque, and signs it, ordering their bank, known as the drawee, to pay that person or company the amount of money stated

Cheques are a type of bill of exchange and were developed as a way to make payments without the need to carry large amounts of money. While paper money evolved from promissory notes, another form of negotiable instrument, similar to cheques in that they were originally a written order to pay the given amount to whoever had it in their possession (the "bearer"). The four main items on a cheque are Drawer, the person or entity who makes the cheque

Payee, the recipient of the money

Drawee, the bank or other financial institution where the cheque can be presented for payment Amount, the currency amount

Essentials of cheque
Writing, signed Unconditional order Issued by specified banker, certain payee

On demand
Certain amount Must bear a date

Types of cheque
Types of cheques The cheques are of two types. (i) Open cheques and (ii) crossed cheques. (i) Open Cheques. Open cheques are those cheques which are paid across the counter of the bank. Open cheques may be bearer or order cheques. (a) Bearer cheques. If a drawer orders the bank to pay a stated sum of money to the bearer it is called a bearer cheque. Any person who lawfully possesses a beaker cheque is entitled to receive payment of that cheque. (b) Order cheque. If a cheque is to the order of a person in whose favor the cheque is drawn it is called order cheque. The order cheque is paid by the bank only when the bank is satisfied about the identity of the payee. (ii) Crossed Cheques. If a cheque is crossed by drawing two parallel lines across the face of the cheque, with or without the words & Co or A/c payee only, it is called a crossed cheques. The crossed cheque cannot be paid on the counter of the drawee bank. It will be deposited in the account of a person
in whose order or favor it is drawn.

THANK YOU