Cheque

A

TEAM

SIKORSKY

PRODUCTION

CHEQUES

GROUP MEMBERS NAME & ID :

Essentials: Instrument in writing

Contains unconditional order

Drawn by the Drawer

Drawn upon a specified banker

To pay a certain sum of money

Payable on demand

It is signed by the maker

Cheques

Order cheque Bearer

cheque

Blank cheque

Stale cheque

MultilatedCheque

Post dated cheque

Cheque

open cheque

Crossed cheque

Gift cheque

Traveller‟scheque

Parties of cheque:

Parties of cheque are –

Drawer

PayeeDrawee

Receipt need not be obtained

Convenient to receive money

Near money

Endorsable

No need of counting

An automatic record is maintained

Material alteration: addition to or deletion of text from a legal

instrument that significantly changes its legal sense or effect may thus invalidate it.

examples of material alteration1.The date2.the sum

3.The place4.The name

5.The crossing6.The rate of interest

Authorised

alteration

Non-material alteration

Examples of Authorised alteration:

1.Filling blanks, 2. blank endorsement

3.Acceptance conditional

4.General crossing

5.Consent of parties

Examples of Non-material alteration:

1.Correcting mistakes, 2.Intention of original parties,

3.Consent of parties

4.Result of an accident

Besides the above two types of crossing, in recent years, the following types of crossing have been developed

1. “Not Negotiable” crossing

2.Restrictive crossing or Account payee crossing

3.Double crossing

ENDORSEMENT:WRITING ON THE BACK OF THE INSTRUMENT FOR THE

PURPOSE OF NEGOTIATION.

Essentials of a valid

endorsement:On the back or face or on allonge

Made by maker/holder

Signed by endorser

Shouldn’t be partial

Completed by delivery

Made in ink

1.Blank or General Endorsement

2.Special or full

3.partial or invalid

4.Restrictive

5.Conditional or qualified

Pay „X‟ or order

Pay to the order of „X‟

Sans recourse

facultative

Sans Frais

Transfer of property

Right to sue the acceptor

Right to recover from endorsee

Right of further negotiation

LEGAL EFFECTS OF AN

ENDORSEMENT :

DIFFERENCE BETWEEN BILL OF EXCHANGE AND

CHEQUE

CHEQUE BILL OF EXCHANGE

Drawee : drawn on banker

Payable on demand : always

on demand

Days of grace: three days

Acceptance : no acceptance

required

Notice of dishonor: not

necessary

Any person/banker

Demand and expiry

No grace days

Need acceptance

Necessary

DIFFERENCE BETWEEN BILL OF EXCHANGE &

CHEQUE

CHEQUE BILL OF EXCHANGE

Crossing : crossed

generally or specially

Stamping : doesn’t require

stamping

Discounting : cant be

discounted

Can not be crossed.

Must be stamped

Can be discounted

Holder:Any person who have the possession of the instrument

and also the right to recover money in his own name.

Holder In Due Course: “Bonafide holder for value without notice”. And also

becomes a possessor for consideration.

Consideration for becoming a holder

in due course : Valuable consideration on value

Legal method

Holder before the date of maturity

Holder in good faith

Privileges of a holder in due course:

Title free from equities

Cured of all defects

Liability of prior parties

Rights in case of fictitious bills

Estoppel against

Denying original

validity

Denying the

capacity

Endorser to deny

capacity of prior

parties

Difference between holder and

holder in due course

Holder in due course Holder

Entitlement: acquires his possession

Consideration : consideration is a must

Maturity : before maturity

Title : free from defects

Entitled in his own name

Not necessary

After maturity

Doesn’t acquire good title

Difference between holder and

holder in due course

Holder in due course Holder

Presumption: bound to

be a holder

Recovering: liabilities of

prior parties

Privileges: Free from all

equities

Cant be a holder in due

course

Can recover the amount

No special privileges

THANK YOU ALL