Tag: Negotiable

How do I negotiate a salary increase with my boss?

Raise? Who wouldn’t? You may negotiate a salary increase with my boss and supervisor. Along the way from campus recruitment, you secretly weigh whether you have a bargaining chip for a salary increase and whether you should take the initiative to talk to the boss about the salary increase, but what if the salary increase fails and the boss has a bad opinion of you? ? How to speak?

Next, I will put together a secret for you to negotiate a salary increase.

4 Tips for Asking for a Raise

It is very important to assess the situation:

You must propose and negotiate a salary increase when the time, place, and occasion conditions are all available. Otherwise, raising it suddenly will only disgust the boss. The most suitable time to talk about salary increases is generally when the company conducts a performance evaluation at the end of each year. After the evaluation results come out, if you find that you have room for a salary increase, you can use your performance as capital to propose a salary increase to the boss. The possibility of success in doing so is more sexual.

Grasping performance is the key:

Don’t talk to your boss about the fact that you are getting a loan, and you have personal consumption issues such as buying a car or a house. You have to prove to the company that you deserve the raise, not that you need it. Seize the performance you have made and show enough confidence. Convince yourself first, then you will be able to convince your boss.

Find out the timetable for a salary increase:

It is very important to grasp the salary increase time of the company. Most companies will raise their salary at the beginning of the year; some companies have a relatively small number of people and are easier to operate. They will increase their salary twice a year, in January and July. If you come across a company with irregular pay raises, be careful.

Such companies will say during the interview: At present, we can only give you so much, and we will consider a salary increase based on your performance in the future. This shows that the company will not consider and negotiate a salary increase in a short period. There are also two possibilities: the company has just started and really can’t make so much money to pay wages, or the company is in recession and it will be difficult to raise wages.

How much to consider for a salary increase:

When proposing a salary increase, you also need to honestly value yourself and don’t ask for a price. Do your research first to find out what salaries are in your industry and where you are.

If you are in a popular major, the salary increase you ask for can be increased appropriately. If the company disagrees, talk to your boss about whether you can compensate in other ways, such as bonuses, vacations, transportation expenses, etc. The following Reason and negotiate for the salary increase below are next;

Reason #1: Personal Importance

If you are a software design department working in an IT company, then you are more likely than your colleagues in the human resources department of the same company to ask for a raise. Because you are at the heart of the company. This is very important, the market determines the value, how much you are worth is not what you say. For a company, the more wealth you create, the more valuable you are.

To keep a cash cow like you, even the boss will take the initiative to give you a raise. If you are just a marginal person if you are not much more than you are, and you are not much less, then you should be obedient, and don’t touch this sensitive topic rashly, lest you not eat mutton, and you will be a slap in the face. Whether one’s position is in the company’s core department or closely related to the company’s core project is one of the decisive factors for the success of the salary increase.

Reason #2: Job Suitability

If the job is not on the correct career development path, it is hard to say a salary increase, and I am afraid that if I have no development prospects, I may not be able to protect my current social status. This is a long-term question, for a moment or a lifetime. Everyone has their unique professional temperament and attributes, different professional interests and tendencies, and their ability and potential models.

These elements determine that everyone has an appropriate job, and the suitable position is the stage for you to learn your self-worth. Only when you find a suitable stage for your development, will you have the opportunity to continue to develop. Only with a high degree of personal and professional matching can one’s “salary situation” improve.

The first two points are from the perspective of employees, the analysis of the point of view. Conversely, they should consider the problem from the perspective of the employer, and base their request for a salary increase on an objective, rational and fair basis.

Are you worth it?

This is usually the first thing a boss thinks about when faced with a request for a raise. How are you doing? How much have you contributed to the enterprise? Do these contributions of yours match what you are being compensated for now? If it doesn’t match, how much should you add? If you approve your request, what changes will it bring to the enterprise? Will it break the salary balance and cause dissatisfaction among other employees? In the final analysis, this series of questions is three words “Are you worth it?”

Are you suitable?

Just like the question Is it right for me? when facing your request, the company will also think from a longer-term perspective. Maybe you are good at present, but for the unpredictable future, can you still grasp it calmly? Maybe your current ability is your limit. In this case, will it make sense to renew the contract with a salary increase?

These are questions that you have to think about carefully before asking for a raise.

Asking the boss for a raise is not a very casual thing, nor is it something that can happen often, so be fully prepared in advance, consider various possible situations, and consider the advantages and disadvantages of each position. Gains and losses, and then think about whether you need a raise in the end, only in this way will you have greater certainty.

Talking about salary increases requires skill

After careful consideration, you decide to bring it up to your boss. This is where you need the new skills. Whether the technique is used properly or not has a direct relationship with the final result. Experts give the following two suggestions.

Clearly state one’s intentions

Now that you have decided to mention it, don’t hesitate after thinking about it. Have the courage to express your thoughts and requests directly and clearly. If you can’t express yourself clearly, not only will you not be able to achieve the implicit effect you imagined, but you will get twice the result with half the effort. So, be sure to express yourself.

After reading the above tips, negotiate and I hope everyone can get a successful salary increase!

How do I negotiate a salary increase with my boss?

November 14, 2022
How to negotiate Promotion and Salary Increase Skills

How to talk about promotion and salary increase, the new skills of negotiating salary increases. In the development of the workplace, everyone must understand how to talk about promotion and salary increases and the skills of negotiating salary increases. Let’s take a look at what to do with the job search editor.

Here are the articles to explain, how to talk about promotion and salary increase, the new skills of negotiating salary increases

The first trick: talk about promotion if you have no position, talk about salary increase if you have talent but no money

In the workplace, who doesn’t care about their promotion and salary increase? Then who will propose promotion and salary increases to the boss? Those who have no position will ask their boss for a promotion, and those who have talent. But no money will ask their boss for salary increases. Promotion and salary increases are a kind of affirmation of people’s work, and the boss thinks. That your contribution is directly proportional to the existing position and salary. In layman’s terms, the boss reflects your value with your position and buys your value with your salary.

The second trick: promotion and salary increases are not easy things

Everyone is eager for a promotion and a raise at the end of the year. Generally, companies will adjust their salary once a year, and the average salary increases by about 8.5%. The company will comprehensively consider factors such as industry level, corporate profitability, and CPI, and finally, decide how much to increase the salary. The same is true for promotion. The company will have a clear promotion system. For example, when the person in the original position retires or dismiss. They can be promoted from the personnel in subordinate positions.

This series of systems and regulations have provided the company with a transparent platform for promotion and salary increases. Therefore, within the scope of the regulations, if there is a situation consistent with it, the boss will take the initiative to propose a promotion and salary increases. Therefore, promotion and salary increases are not easy things. They are not things that the boss has the final say in. Some of them are determined by the company’s system regulations.

The third trick: talking about promotions and salary increases must be carefully thought out

Many professionals are full of desire for promotion and salary increases in their hearts, ignoring their reasons for proposing promotions and salary increases. Therefore, many professionals do not think about it, go to the boss’s office, and simply propose promotions and salary increases to the boss. Salary, even some threatening communication, if you don’t give a promotion and salary increase, you will resign or something.

This kind of communication about promotion and salary increase is the most unwilling situation for the boss. Everything is about to cause and effect. How can a request without any reason lead to the desired result? Therefore, the first taboo when discussing promotion and salary increases in the workplace is to talk about promotion and salary increases without thinking. The second taboo is not to choose an inappropriate time and place to communicate this issue.

The fourth trick: clever communication, workplace win-win

Professionals are most concerned about promotion and salary increases. But how to ask their boss for a promotion and salary increases is more of a concern for professionals. Clever communication can often achieve a win-win situation in the workplace. Actions and achievements at work are the most favorable evidence and reasons for promotion and salary increase.

Therefore, first, take stock of your actions and achievements or affirmations at work. Communicate with your boss with these well-thought-out reasons, list your work performance for the boss, and at the same time highlight your new skills and techniques, so that the boss can see the pace of your progress. In addition, dare to tell your boss about your future work plan. So that the boss can see a positive employee.

After reading the above content, you will know how to negotiate a promotion and salary increase and the new skills of negotiating salary increases.

How to negotiate Promotion and Salary Increase by new Skills; Photo by Sebastian Herrmann on Unsplash.

November 11, 2022
Negotiable Instruments: Types, Classification, Importance!
Meaning of Negotiable Instrument: A negotiable instrument is a specialized type of “contract” for the payment of money that is unconditional and capable of transfer by negotiation. The Concept of the study Explains – Negotiable Instruments: Types of Negotiable Instruments, Classification of Negotiable Instruments, Importance of Negotiable Instruments. Common examples include cheques, banknotes (paper money), and commercial paper. Also learned, Negotiable Instruments: Types, Classification, Importance!

Explain and Learn, Negotiable Instruments: Types, Classification, Importance!

A promissory note: is a Written promise by the maker to pay money to the payee. the most common type of promissory note is a bank note, Which is defined as a promissory note made by a bank and payable to bearer on demand. Through promissory note a person i.e. maker (drawer) promise to pay the payee a specific amount on a specified date Without any condition. “o the important points in a promissory note are 1) it is unconditional order 2) a specific amount 3) payable to the order of a person or on demand.

A bill of exchange: is a Written order by the drawer to the drawee to pay money to the payee. The most common type of bill of exchange is the cheque, which is defined as a bill of exchange drawn on a banker and payable on demand. &ills of exchange are used primarily in international trade and are written orders by one person to his bank to pay the bearer a specific sum on a specific date sometime in the future.

A cheque: is an unconditional order in writing drawn upon a specified banker signed by the drawer, directing to the banker to pay on demand a certain sum of money to or to the order of a person named therein or to the bearer.

#Types of Negotiable Instruments:

Parties to various types of Negotiable Instruments:

Drawer or Drawee:

The maker of a bill of exchange or cheque is called the “drawer”; the person thereby directed to pay is called the “Drawee”.

Drawee in case of need:

When in the bill or in any endorsement thereon the name of any person is given in addition to the Drawee to be resorted to in case of need such person is called a “drawee in case of need”.

Acceptor:

After the drawee of a bill has signed his assent upon the bill, or, if there are more parts thereof than one, upon one of such parts, and delivered the same, or given notice of such signing to the holder or to some person on this behalf, he is called the “acceptor”.

The acceptor for the honor:

When a bill of exchange has been noted or protested for non-acceptance or for better security, and any person accepts is supra protest for the honor of the drawer or of any one of the endorsers, such person is called an “acceptor for honor”.

Payee:

The person named in the instrument, to whom or to whose order the money is by the instrument directed to be paid, is called the “payee”.

Holder:

The “holder” of a promissory note, bill of exchange or cheque means any person entitled in his own name to the possession thereof and to receive or recover the amount due thereon from the parties thereto. Where the note, bill or cheque is lost or destroyed, its holder is the person so entitled at the time of such loss or destruction.

Holder in due course:

“Holder in due course” means any person who for consideration became the possessor of a promissory note, bill of exchange or cheque if payable to bearer, or the payee or endorse thereof, if (payable to order) before the amount mentioned in it became payable, and without having sufficient cause to believe that any defect existed in the title of the person from whom he derived his title.

Endorsement:

When the marker or holder of a negotiable instrument signs the same, otherwise than as such maker, for the purpose of negotiation, one the back or face thereof or on a slip of paper annexed thereto, or so signs for the same purpose a stamped paper intended to be completed as a negotiable instrument, he is said to endorse the same, and is called the “endorser”.

Capacity to make, etc., promissory notes, etc.: Every person capable of contracting, according to the law to which he is subject, may bind himself and be bound by the making, drawing, acceptance, endorsement, delivery and negotiation of a promissory note, bill of exchange or cheque.

Minor:

A minor may draw, endorse, deliver and negotiate such instruments so as to bind all parties except himself. Nothing herein contained shall be deemed to empower a corporation to make, endorse or accept such instruments except in cases in which, under the law for the time being in force, they are so empowered.

Agency:

Every person capable of binding himself or of being bound, as mentioned in section 26, may so bind himself or be bound by a duly authorized agent acting in his name. A general authority to transact business and to receive and discharge debts does not confer upon an agent the power of accepting or endorsing bills of exchange so as to bind his principal.

#Classification of Negotiable Instruments:

The Following Classification of Negotiable Instruments are:

Inland Instrument:

A promissory note, bill of exchange or cheque which is 1) both drawn or made in India and made payable in India, or 2) drawn upon any person resident in India, is deemed to be an inland instrument. A bill of exchange drawn upon a resident in India is an inland bill irrespective of the place where it was drawn.

Foreign Instrument:

An instrument, which is not an inland instrument, is deemed to be a foreign instrument. Foreign bills must be protested for dishonor if such protest is required by the law of the place where they are drawn. But protest in case of inland bills is optional.

Instruments payable on demand:

A cheque is always payable on demand and it cannot be expressed to be payable otherwise than on demand. A promissory note or bill of exchange is payable on demand:
- When no time for payment is specified in it.
- When it is expressed to be payable ‘on demand’, or ‘at sight’ or ‘on presentment’. The words ‘on demand’ is usually in a promissory note, the words ‘at sight’ are in a bill of exchange.
Ambiguous Instrument:

When an instrument owing to its faulty drafting may be interpreted either as a promissory note or a bill of exchange, it is called an ambiguous instrument. Its holder has to elect once for all whether he wants to treat it an as a promissory note or a bill of exchange. Once he does so he must abide by his election.

Forged Instrument:

An instrument is a forged when it is drawn, made or alternated in writing to prejudice another man’s rights. The most common form of forgery is signing another person’s signature, signing the name of the fictitious or none existing person. Fraudulently writing the name of an existing person is also the forgery.

Forgery is a nullity and, therefore, it passes no title. No holder of a forged instrument acquires any right on the instruments. Even a holder in due course gets no title if he comes into the possession of a forged instrument. A person has to pay money on a forged instrument by mistake, can recover it from the person to whom he has paid for it.

Bearer And Order Instruments:

An instrument is a bearer instrument when the amount payable thereon is payable to the bearer and him as a holder and in lawful possession, thereof is entitled to enforce payment due on it.

Negotiable Instruments: Types, Classification, Importance!

#Importance of Negotiable Instruments:

Negotiable Instrument is a certain type of document, which transfers the money. It makes easy to carry money from one place to another place. So, it is very important for the transfer of money in the business sector.

The following points can grasp as the importance of a Negotiable Instrument.
- Negotiable Instrument is an easier means of transfer of money.
- It is easy to delivery from one place to another place.
- It helps to flourish in the business sector.
- It creates the right of property.
- It has the easy negotiability and somewhere it provides the security.
- It makes the fast transaction of money.
- It makes the security of money as well as personal security in course of the transaction of money.
Negotiable Instrument is an easier way to transfer money from one place to another place. It provides a safe way to deliver the money. It has an important role to develop the way of money transaction as well as the business realm.

#Promissory Note:

A Promissory Note is an instrument in writing, except government note or bank currency, containing unconditional undertaking signed by the Maker to pay a certain sum of money only to, or to the order of or to the bearer or to a certain person related to the instrument. Section 2(f) of Negotiable Instrument Act, 2034 The person, who makes the promissory note or promises, is called a ‘Maker’ and he has to sign that document as a debtor.

The person to whom payment is to be made is called the ‘payee’. A promissory note is an unconditional promise to pay put into writing by a person or entity and signed by the borrower or person making the promise. Promissory notes are often created between a borrower and a lender in which the borrower promises to pay the lender a specific amount of money by the specified date.

A promissory note, similar to a contract, contains all of the details pertaining to the transaction such as the amount borrowed, late fees, interest rates, and so forth, and should contain the term “promissory note” within the body. In terms of enforceability, a promissory note lies somewhere between an informal IOU and a formal loan contract.

#Bill of Exchange:

Bill of exchange is another type of Negotiable Instrument. It is also in practice in the business sector. A bill of exchange is an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of, a certain person or to the bearer of the instrument.

It is defined under section 2(g) of the Nepalese Negotiable Instrument Act, 2034. Section 2(g) defines as “A bill of exchange is an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money to, or to the order of a person or to a person or to the bearer of the instrument”.

On the basis of the above definition, there are three parties in the bill of exchange, which are as below:
- Drawer: The maker of a bill of exchange.
- Drawee: The person, who is directed to pay.
- Payee: The person who receives the bill of exchange.
Another commonly used type of negotiable instrument is the bill of exchange. A bill of exchange is a financial document that states an individual or business will pay a certain amount on a specific date. The date may range from the date it is signed, to within six months into the future.

A bill of exchange must contain the signature of the individual promising to pay to be considered legally binding. Unlike a promissory note, a bill of exchange may be transferred to a third party, binding the payor to pay the third party who was not involved in the first place.

#Cheque:

The cheque is a very common form of negotiable instrument. If you have a savings bank account or current account in a bank, you can issue a cheque in your own name or in favor of others, thereby directing the bank to pay the specified amount to the person named in the cheque. Therefore, a cheque may be regarded as a bill of exchange; the only difference is that the bank is always the drawee in case of a cheque.

The Negotiable Instruments Act, 1881 defines a cheque as a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand. From the above dentition, it appears that a cheque is an instrument in writing, containing an unconditional order, signed by the maker, directing a specified banker to pay, on demand, a certain sum of money only to, to the order of, a certain person or to the bearer of the instrument.

The person who draws a cheque is called the “Drawer”. The banker on whom it is drawn is the “Drawee” and the person in whose favor it is drawn is the “payee”. Actually, a cheque is an order by the account holder of the bank directing his banker to pay on demand, the specified amount, to or to the order of the person named therein or to the bearer.
June 20, 2018
Negotiable Instruments: Definition, Characteristics, and Features!
A Negotiable Instrument is a document guaranteeing the payment of a specific amount of money, either on demand or at a set time, with the payer usually named on the document. The Concept of the study Explains – Negotiable Instruments: Meaning, Definition of Negotiable Instruments, Characteristics of Negotiable Instruments, and Features of Negotiable Instruments. More specifically, it is a document contemplated by or consisting of a contract, which promises the payment of money without condition, which may be paid either on demand or at a future date. The term can have different meanings, depending on what law is being applied and what country and context it is used in. Also learned, Commercial Bills, Negotiable Instruments: Definition, Characteristics, and Features! Read and share the given article in Hindi.

Explain and Learn, Negotiable Instruments: Definition, Characteristics, and Features!

Negotiable Instruments Act: The law relating to “Negotiable Instruments” is contained in the Negotiable Instruments Act, 1881, as amended up-to-date. It deals with three kinds of negotiable instruments, i.e., Promissory Notes, Bills of Exchange and Cherubs. The provisions of the Act also apply to “hands” (an instrument in oriental language), unless there is a local usage to the contrary.

Other documents like treasury bills, dividend warrants, share warrants, bearer debentures, port trust or improvement trust debentures, railway bonds payable to bearer etc., are also recognized as negotiable instruments either by mercantile custom or under other enactments like the Companies Act, and therefore, Negotiable Instruments Act is applicable to them.

#Definition of Negotiable Instruments:

The word “Negotiable” means “Transferable by delivery”, and the word “Instrument” means “A written document by which a right is created in favor of some person”. Thus, the term “Negotiable instrument” literally means “a written document transferable by delivery”.

According to Section 13 of the Negotiable Instruments Act,

“A negotiable instrument means a promissory note, bill of exchange or cheque payable either to order or to bearer.”

The Act, thus, mentions three kinds of negotiable instruments, namely notes, bills and cherubs and declares that to be negotiable they must be made payable in any of the following forms:

A) Payable to order:

A note, bill or cheque is payable to order which is expressed to be “payable to a particular person or his order”.

But it should not contain any words prohibiting the transfer, e.g., “Pay to A only” or “Pay to A and none else” is not treated as “payable to order” and therefore such a document shall not be treated as the negotiable instrument because its negotiability has been restricted.

There is, however, an exception in favor of a cherub. A cheque crossed “Account Payee only” can still be negotiated further; of course, the banker is to take extra care in that case.

B) Payable to bearer:

“Payable to bearer” means “payable to any person whom so ever bears it.” A note, bill or cheque is payable to bearer which is expressed to be so payable or on which the only or last endorsement is an endorsement in blank.

The definition given in Section 13 of the Negotiable Instruments Act does not set out the essential characteristics of a negotiable instrument. Possibly the most expressive and all-encompassing definition of negotiable instrument had been suggested by Thomas who is as follows:

“A negotiable instrument is one which is, by a legally recognized custom of trade or by law, transferable by delivery or by endorsement and delivery in such circumstances that (a) the holder of it for the time being may sue on it in his own name and (b) the property in it passes, free from equities, to a bonfire transferee for value, notwithstanding any defect in the title of the transferor.”

#Characteristics of Negotiable Instruments:

An examination of the above definition reveals the following essential characteristics of negotiable instruments which make them different from an ordinary chattel:

Easy negotiability:

They are transferable from one person to another without any formality. In other words, the property (right of ownership) in these instruments passes by either endorsement or delivery (in case it is payable to order) or by delivery merely (in case it is payable to bearer), and no further evidence of transfer is needed.

The transferee can sue in his own name without giving notice to the debtor:

A bill, note or a cheque represents a debt, i.e., an “actionable claim” and implies the right of the creditor to recover something from his debtor. The creditor can either recover this amount himself or can transfer his right to another person. In case he transfers his right, the transferee of a negotiable instrument is entitled to sue on the instrument in his own name in case of dishonor, without giving notice to the debtor of the fact that he has become the holder.

The better title to a bonfire transferee for value:

A bonfire transferee off a negotiable instrument for value (technically called a holder in due course) gets the instrument “free from all defects.” He is not affected by any defect of title of the transferor or any prior party. Thus, the general rule of the law of transfer applicable in the case of ordinary chattels that “nobody can transfer a better title than that of his own” does not apply to negotiable instruments.

Examples of Negotiable Instruments:

The following instruments have been recognized as negotiable instruments by statute or by usage or custom:
- Bills of exchange;
- Promissory notes;
- Cheques;
- Government promissory notes;
- Treasury bills;
- Dividend warrants;
- Share warrants;
- Bearer debentures;
- Port Trust or Improvement Trust debentures;
- Hindus, and;
- Railway bonds payable to bearer, etc.
Examples of Non-negotiable Instruments:

These are:
- Money orders;
- Postal orders;
- Fixed deposit receipts;
- Share certificates, and;
- Letters of credit.
Endorsement:

Section 15 defines endorsement as follows: “When the maker or holder of a negotiable instrument signs the same, otherwise than as such maker, for the purpose of negotiation, on the back or face thereof or on a slip of paper annexed thereto, or so signs for the same purpose a stamped paper intended to be completed as negotiable instrument, he is said to endorse the same, and is called the endorser.”

Thus, an endorsement consists of the signature of the holder usually made on the back of the negotiable instrument with the object of transferring the instrument. If no space is left on the back of the instrument for the purpose of endorsement, further endorsements are signed on a slip of paper attached to the instrument. Such a slip is called “along” and becomes part of the instrument. The person making the endorsement is called an “endorser” and the person to whom the instrument is endorsed is called an “endorse.”

Kinds of Endorsements:

Endorsements may be of the following kinds:
1. Blank or general endorsement: If the endorser signs his name only and does not specify the name of the indorse, the endorsement is said to be in blank. The effect of a blank endorsement is to convert the order instrument into a bearer instrument which may be transferred merely by delivery.
2. Endorsement in full or special endorsement: If the endorser, in addition to his signature, also adds a direction to pay the amount mentioned in the instrument to, or to the order of, a specified person, the endorsement is said to be in full.
3. Partial endorsement: Section 56 provides that a negotiable instrument cannot be endorsed for a part of the amount appearing to be due on the instrument. In other words, a partial endorsement which transfers the right to receive only a partial payment of the amount due on the instrument is invalid.
4. Restrictive endorsement: An endorsement which, by express words, prohibits the indorse from further negotiating the instrument or restricts the indorse to deal with the instrument as directed by the endorser is called “restrictive” endorsement. The indorse under a restrictive endorsement gets all the rights of an endorser except the right of further negotiation.
5. Conditional endorsement: If the endorser of a negotiable instrument, by express words in the endorsement, makes his liability, dependent on the happening of a specified event, although such event may never happen, such endorsement is called a “conditional” endorsement.
In the case of a conditional endorsement, the liability of the endorser would arise only upon the happening of the event specified. But they endorse can sue other prior parties, e.g., the maker, acceptor etc. if the instrument is not duly met at maturity, even though the specified event did not happen.

Negotiable Instruments: Definition, Characteristics, and Features!

#Features of Negotiable Instruments:

Negotiable Instrument, in law, a written contract or another instrument whose benefit can be passed on from the original holder to new holders. The original holder (the transferor) must countersign the instrument (as in the case of a cheque) or merely deliver it (as in the case of a bank note) to the new holder; the new holder is then entitled to the benefit of the instrument (in the case of a cheque, to the money from the bank; in the case of the banknote, to the sum promised on the note).

According to section 13 of the Negotiable Instruments Act, 1881, a negotiable instrument means,

“Promissory note, bill of exchange, or cheque, payable either to order or to bearer.”

Major features of negotiable instruments are:

The following features below are:

Easy Transferability:

A negotiable instrument is freely transferable. Usually, when we transfer any property to somebody, we are required to make a transfer deed, get it registered, pay stamp duty, etc. But, such formalities are not required while transferring a negotiable instrument.

The ownership is changed by mere delivery (when payable to the bearer) or by valid endorsement and delivery (when payable to order). Further, while transferring it is also not required to give notice to the previous holder.

Title:

Negotiability confers an absolute and good title on the transferee. It means that a person who receives a negotiable instrument has a clear and indisputable title to the instrument.

However, the title of the receiver will be absolute, only if he has got the instrument in good faith and for consideration.

Also, the receiver should have no knowledge of the previous holder having any defect in his title. Such a person is known as the holder in due course.

Must be in writing:

A negotiable instrument must be in writing. This includes handwriting, typing, computer print out and engraving, etc.

Unconditional Order:

In every negotiable instrument, there must be an unconditional order or promise for payment.

Payment:

The instrument must involve the payment of a certain sum of money only and nothing else.

For example, one cannot make a promissory note on assets, securities, or goods.

The time of payment must be certain:

It means that the instrument must be payable at a time which is certain to arrive. If the time is mentioned as “when convenient” it is not a negotiable instrument.

However, if the time of payment is linked to the death of a person, it is nevertheless a negotiable instrument as death is certain, though the time thereof is not.

The payee must be a certain person:

It means that the person in whose favor the instrument is made must be named or described with reasonable certainty.

The term “person” includes individual, body corporate, trade unions, even secretary, director or chairman of an institution. The payee can also be more than one person.

Signature:

A negotiable instrument must bear the signature of its maker. Without the signature of the drawer or the maker, the instrument shall not be a valid one.

Delivery:

Delivery of the instrument is essential. Any negotiable instrument like a cheque or a promissory note is not complete until it is delivered to its payee.

For example, you may issue a cheque in your brother”s name but it is not a negotiable instrument until it is given to your brother.

Stamping:

Stamping of Bills of Exchange and Promissory Notes is mandatory. This is required as per the Indian Stamp Act, 1899. The value of stamp depends upon the value of the pro-note or bill and the time of their payment.

Right to file suit:

The transferee of a negotiable instrument is entitled to file a suit in his own name for enforcing any right or claim on the basis of the instrument.

Notice of transfer:

It is not necessary to give notice of transfer of a negotiable instrument to the party liable to pay.

Presumptions:

Certain presumptions apply to all negotiable instruments, for example, consideration is presumed to have passed between the transferor and the transferee.

Procedure for suits:

In India, a special procedure is provided for suits on promissory notes and bills of exchange.

The number of transfer:

These instruments can be transferred indefinitely until they are at maturity.

Rule of evidence:

These instruments are in writing and signed by the parties, they are used as evidence of the fact of indebtedness because they have special rules of evidence.

Exchange:

These instruments relate to payment of certain money in legal tender, they are considered as substitutes for money and are accepted in exchange of goods because cash can be obtained at any moment by paying a small commission. Read and share the given article (Negotiable Instruments: Definition, Characteristics, and Features) in Hindi.
June 20, 2018