The Features of the Negotiable Instruments Act
Some important features of The Negotiable Instruments Act are:
- A holder of an instrument is considered to be the property’s owner.
- The instruments can be transferred easily.
- In due course, the holder gets the instrument that is free from every defect.
- The holder can take legal action on the instrument under his name.
- Till maturity, the instrument can be transferred. When the matter comes to cheques, till the instrument turns stale.
- Some equal presumptions get applied to every negotiable instrument unless the opposite is proved.
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The Kinds of Instruments
The Negotiable Instrument Act recognizes only 3 kinds of instruments:
- Bill of Exchange
- Cheque
- Promissory Note
Nonetheless, it doesn’t mean that other instruments aren’t negotiable instruments, but they must satisfy some conditions of negotiability like the following:
- The instrument can be transferred freely through the custom of trade, and the transferability might happen through (a) Delivery and Endorsement (b) Delivery.
- The person who gets it must get it without any defects.
- The holder has every right to transfer the instrument, and the negotiability does not end till maturity.
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