Distinguish between the following: Bearer and order instrument
CS Executive · Economic, Business and Commercial Laws · PYQS · December 2019
Distinguish between the following: Bearer and order instrument
Answer & Explanation:
Bearer Instrument: A promissory note, bill of exchange or cheque is payable to bearer when (i) it is expressed to be so payable, or (ii) the only or last endorsement on the instrument is an endorsement in blank. A person who is a holder of a bearer instrument can obtain the payment of the instrument. Order Instruments: A promissory note, bill of exchange or cheque is payable to order (i) which is expressed to be so payable; or (ii) which is expressed to be payable to a particular person, and does not contain any words prohibiting transfer or indicating an intention that it shall not be transferable.
Topics: Negotiable Instruments Act, 1881
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