After studying this chapter you will be able to understand: What are the main negotiable instruments are? Cheque, types of cheques, bearer cheque, anted – dated cheque, stale cheque, mutilated cheque, post-dated cheque, parties to a negotiable instruments,. | Revise Lecture 23 What are the main negotiable instruments are? Negotiable Instrument The main negotiable instruments are;\ Promissory notes Bill of exchange Cheques CHEQUES Cheques A cheque is a negotiable instrument instructing a financial institution to pay a specific amount of a specific currency from a specific demand account held in the maker /depositor’s name with that institution. Actually a cheque is an order by the account holder of the bank directing his banker to pay on demand, the specified amount to the order f the person named therein or to the bearer. Cheques The use of bills of exchange facilitated trade by eliminating the need for merchants to carry large quantities of currency to purchase goods and services. Cheques Cheques generally contain; Place of issue Cheque number Date of issue Payee Amount of currency Cheques 6. Signature of the drawer 7. Routing / account number 8. Fractional routing number A cheque is generally valid indefinitely or for six months after . | Revise Lecture 23 What are the main negotiable instruments are? Negotiable Instrument The main negotiable instruments are;\ Promissory notes Bill of exchange Cheques CHEQUES Cheques A cheque is a negotiable instrument instructing a financial institution to pay a specific amount of a specific currency from a specific demand account held in the maker /depositor’s name with that institution. Actually a cheque is an order by the account holder of the bank directing his banker to pay on demand, the specified amount to the order f the person named therein or to the bearer. Cheques The use of bills of exchange facilitated trade by eliminating the need for merchants to carry large quantities of currency to purchase goods and services. Cheques Cheques generally contain; Place of issue Cheque number Date of issue Payee Amount of currency Cheques 6. Signature of the drawer 7. Routing / account number 8. Fractional routing number A cheque is generally valid indefinitely or for six months after the date of issue unless otherwise indicated, this varies depending on where the cheque is drawn. Cheques Features of a Cheque Cheques Features of a Cheque Some important features of a cheque are given below; A cheque must be in writing and duly signed by the drawer. It contains an unconditional order. It is issued on a specified banker only. Cheques Features of a Cheque 4. The amount specified is to be always certain and must be clearly mentioned both in figures and words. 5. The payee is always certain. 6. It is always payable on demand. cheque must bear a date, otherwise it is invalid and shall not be honoured by the bank. Cheques Features of a Cheque The parties to regular cheques include a maker or drawer, the depositor writing a cheque, a drawee, the financial institution where the cheque can be presented for payment, and a payee, the entity to whom the maker issues the cheque. The drawer drafts or draw a cheque, which is also called cutting cheque, especially in the United
