Question #1: John Martin writes the following words on the back of an envelope:
ID: 458699 • Letter: Q
Question
Question #1: John Martin writes the following words on the back of an envelope: “I, John Martin, promise to pay Jennifer Forester or bearer $5,000.00 on demand.” Define the term negotiable instrument, and discuss in detail whether this is a negotiable instrument. Describe and explain your answer in depth.
Question #1: John Martin writes the following words on the back of an envelope: “I, John Martin, promise to pay Jennifer Forester or bearer $5,000.00 on demand.” Define the term negotiable instrument, and discuss in detail whether this is a negotiable instrument. Describe and explain your answer in depth.
Explanation / Answer
Negotiable Instrument :
Definition : Negotiable means transferable. This refers to transferable amount or goods from one person to another. Its a statement agreed upon trusted medium for exchange. Under 1881, Negotiable Instrument Act.
Examples : Checks, Drafts, bills of exchange and promissory notes.
Types of Negotiable Instrument :
· Cheques.
· Promissory Notes.
· Bills of Exchange.
Q ) Whether this is a negotiable instrument.
A ) Above statement forms a a regular Promissory note document,( if the document is signed).If a written document an unconditional promise to pay and is payable on demand to a bearer makes it a Negotiable Instrument.
Essential components in a Promissory Note :
· Must be writing.
· Its must contain a promise to pay
· document must contain the bearer name and details of payment( amount or goods).
· It must contain a signature by the marker