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Section 1.


Form of negotiable instruments Person issuing bill of exchange.

An instrument to be negotiable must conform to the ff Non-negotiable instrument

If the indorsement prohibits the further
It must be in writing, signed by the negotiation of the instrument.
maker or drawer; W The nature is merely a simple contract in
Must contain an unconditional promise writing
or to order to pay a sum certain in May not be negotiated but may be
money; U assigned or transferred
Must be payable in demand, or at a fixed
or determinable future time; DFT
Must be payable to order or to bearer; Means what is coined or stamped by public authority and
and; PO or B has its value fixed by public authority. (CASH)
If the instrument is addressed to a
Medium of exchange authorized by government as part
drawee, he must be named or otherwise
of its currency.
indicated therein with reasonable
certainty. NRC Promissory Note

A promise to pay a sum of money

Commercial paper Refer to as Note
Unconditional promise in writing made by one
Written promises or obligations that arise out of person to another signed by the maker, engaging
commercial transactions from the use of such to pay on demand or at fixed or determinable
instruments. i.e, promissory notes, bills of exchange future time, a sum certain in money to order or
to bearer.
Matters to be considered in determining the
negotiability of an instrument: Parties are maker and payee

The whole instrument
Only what appears on the face of the Every person whom an instrument is delivered, by
instrument delivery or by delivery and indorsement
The provisions of the the NIL esp Sec.1
Amount (10,000.00)
Negotiability vs. Validity
Not essential
a valid instrument is not necessarily negotiable
Word I promise to Pay
not every contract is a negotiable instrument

Negotiable Instrument, defined. August 30, 2013

An instrument which possesses all the elements of Manila
negotiability provided in sec.1 of NIL. P10,000.00
Thirty days after date, I promise to pay to
Maker Alfredo M. Almeda or order the sum of ten
Person issuing promissory note. thousand (10,000.00) Pesos.

Sgd. Arsenio Flores

Bill of Exchange

Is an unconditional order
In writing
Addressed by one person to another
Signed by the person giving it
Requiring the person to whom it is addresses to
On demand or at fixed or determinable future
A sum certain in money
To order or to bearer

Section 2.