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Negotiation of Negotiable Instruments
Exam-oriented guide with Bangladesh context
đ Table of Contents
1) Meaning of Negotiation
Negotiation is the transfer of a negotiable instrument so that the transferee becomes the holder with the right to receive payment and sue in own name.
đ Simple formula: Negotiation = Transfer of Title + Rights
2) Essentials & Effects
- Instrument must be negotiable by law/custom.
- Transfer should be before maturity to enjoy HDC rights.
- Transferee must act in good faith and for consideration.
- Title passes completelyâHDC may even get better title than transferor.
3) Methods of Negotiation
đš Bearer Instruments
Negotiated by delivery only.
đš Order Instruments
Negotiated by endorsement + delivery.
4) Types of Endorsement
- Blank: Just signature, becomes bearer.
- Special: Specifies endorsee.
- Restrictive: âPay A onlyâ â stops further transfer.
- Conditional: Adds condition.
- Sans Recourse: Endorser denies liability.
â ī¸ Partial endorsement is invalid in law.
5) Exam Pointers
- Bearer â delivery only
- Order â endorsement + delivery
- Forged endorsement â No title passes
- HDC gets better title than transferor
6) Quick MCQ Practice
- Negotiation of bearer instrument is by:A) Endorsement B) Delivery C) Both D) Assignment
â Answer: B
- Which endorsement stops further transfer?A) Blank B) Restrictive C) Special D) Facultative
â Answer: B
7) āĻŦāĻžāĻāĻ˛āĻž āĻ¨ā§āĻ
Negotiation (āĻ¨ā§āĻā§āĻļāĻŋāĻ¯āĻŧā§āĻļāĻ¨) āĻŽāĻžāĻ¨ā§ āĻšāĻ˛ā§âāĻāĻāĻāĻŋ āĻā§āĻ/āĻŦāĻŋāĻ˛ āĻāĻŽāĻ¨āĻāĻžāĻŦā§ āĻšāĻ¸ā§āĻ¤āĻžāĻ¨ā§āĻ¤āĻ° āĻāĻ°āĻž āĻ¯āĻžāĻ¤ā§ āĻ¨āĻ¤ā§āĻ¨ āĻŦā§āĻ¯āĻā§āĻ¤āĻŋ Holder āĻšā§ā§ āĻāĻžāĻāĻžāĻ° āĻĻāĻžāĻŦāĻŋ āĻāĻ°āĻ¤ā§ āĻĒāĻžāĻ°ā§āĨ¤
- Bearer â āĻļā§āĻ§ā§ Delivery
- Order â Endorsement + Delivery
- āĻāĻžāĻ˛ āĻāĻ¨ā§āĻĄā§āĻ°ā§āĻ¸āĻŽā§āĻ¨ā§āĻā§ āĻā§āĻ¨ā§ āĻ āĻ§āĻŋāĻāĻžāĻ° āĻ¯āĻžā§ āĻ¨āĻž
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