Vous êtes sur la page 1sur 3

Negotiable Instruments:

Section 1. Form of Negotiable Instruments: 1. It must be in writing and signed by the maker or drawer; 2. Must contain an unconditional promise or order to pay a sum certain money; 3. Must be payable on demand, or at fixed or determinable future time; 4. Must be payable on demand or to bearer; and 5. Where the instrument is addressed to a drawee, he must be named or otherwise indicated therein with reasonable certainty. Formal requirements of negotiability in general: 1. The whole of the instrument 2. Only what appears on the face of the instrument 3. The provisions of negotiable instruments law Negotiable instrument is an instrument which possesses all the elements of negotiability. Promissory note is an unconditional promise in writing made by one person to another, signed by the maker engaging to pay on demand, or at a fixed or determinable future time, a sum certain in money to order or to bearer. Parties to a a note: maker & payee Note: Every person to whom an instrument is delivered is a holder. Bill of exchange is unconditional order in writing addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand or at a fixed or determinable future time a sum certain in money to order otr to bearer. Original parties to bill of exchange drawer, drawee & payee Purpose of BE 1. Drawers funds in hands of drawee 2. Liability of drawee for non-payment 3. Section 14 1. The person is possession thereof has a prima facie authority to complete it by filling up the blanks therein. 2. It must be filled up strictly in accordance with the authority given and within a reasonable time. Steps: 1. The mechanical act of writing the instrument completely and in accordance with the requirements of section 1

2. The delivery of the complete instrument by the maker or the drawer to the payee or holder with the intention of giving effect to it. Applications of section 14, 15, 16 1. Those in which obvious blanks are left at the time they are made or indorsed, of such a character as manifestly to indicate that the instruments are incomplete until such blanks shall be filled up and 2. Those which are apparently complete, containing blanks only because the written matter does not so fully occupy the entire paper as to preclude the insertion of additional words or figures, or both. Rules where instrument incomplete but delivered: 1. Authority to fill up blank The holder or the person in possession has prima facie authority to complete an incomplete instrument by filling up the blanks therein. 2. Authority to put any amount A signature on a blank paper delivered in order that it may be converted into a negotiable instrument operates as a prima facie authority to fill it up as such for any amount. 3. Right against party prior to completion The instrument may be enforced only against a party prior to completion if filled up strictly in accordance with the authority given within a reasonable time. 4. Right of a holder in due course The defense that the instrument had not been filled up in accordance with the authority given and within a reasonable time is not available as against a holder in due course. Section 15 Incomplete instrument not delivered Where an incomplete instrument has not been delivered it will not, if completed and negotiated, without authority, be a valid contract in the hands of any holder, as against any person whose signature was placed thereon before delivery. Rules where instrument incomplete and undelivered: 1. Defense even against a holder in due course The fact that an incomplete instrument, completed without authority has not been delivered is a defense even against a holder in due course. 2. Defense available to parties prior to delivery The invalidity of the above instrument is only with reference to the parties whose signatures papers on the instrument before and not after the delivery. 3. Section 16 Delivery when effectual when presumed The delivery in order to be effectual must be made either by or under the authority of the party making drawing, accepting or indorsing as the case maybe. Note: If complete but undelivered, you can cancel it anytime.

Rules where instrument mechanically complete: 1. Undelivered a. Delivery b. Issue c. Holder means the payee or indorsee of a bill or note who is possession of it or the bearer thereof. 2. Delivered The place where the instrument was written 3. In possession of party other than a holder in due course If a complete instrument is found in the possession of an immediate party or a remote party other than a holder in due course, there is prima facie presumption of delivery but subject to rebuttal a. Immediate parties refers to those who are in the sense of having or being held to know of the conditions or limitations placed upon the delivery of the instrument. b. Remote parties who are not direct contractual relation to each other. 4. Delivered conditionally - special purpose only 5. In the hands of holder in due course all parties prior to him is conclusively presumed. Section 23 Forgery inoperative. To enforce thereof against any party thereto can be acquired through or under such signature unless the party against whom it is sought to enforce such right is precluded from setting up the forgery or want of authority. Forgery counterfeit-making or fraudulent alteration of a writing and may consist in the signing of anothers name or the alteration of an instrument in the name amount description of the person and the like, with intent thereby to defraud.