BANKING AFFAIRS

Detailed explanation-1: -Ambiguous instruments.-Where an instrument may be construed either as a promissory note or bill of exchange, the holder may at his election treat it as either and the instrument shall be thence forward treated accordingly.

Detailed explanation-2: -(1) A “negotiable instrument” means a promissory note, bill of exchange or cheque payable either to order or to bearer.

Detailed explanation-3: -Q. 23:-Where an instrument may be construed either as a promissory note or bill of exchange: A void instrument.

Detailed explanation-4: -Ambiguous Instruments Such situations arise in peculiar circumstances only. For example, sometimes the drawee may be a fictitious person or he may be incompetent to contract. Under such circumstances, the holder of such instruments may treat them either as bills of exchange or as promissory notes.

Detailed explanation-5: -A negotiable instrument is a commercial document in writing, that contains an order for payment of money either on demand or after a certain time. There are of three types, namely, bills of exchange, promissory notes and cheques.