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CA Foundation The Negotiable Instruments Act, 1881: related Businesslaw practice

The practice bank below covers broader Businesslaw topics; a dedicated The Negotiable Instruments Act, 1881 lesson is not available yet.

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Businesslaw questions and exercises with answers

Showing questions 1–10 of 10.

'Mr. B, I.O.U. Rs 1,000' is:Read the answer and worked solution →'I promise to pay B Rs 500 seven days after my marriage with C.' This is:Read the answer and worked solution →A promissory note has how many parties?Read the answer and worked solution →A bill of exchange has three parties, namely:Read the answer and worked solution →In a cheque, the drawee is always:Read the answer and worked solution →An 'order instrument' is negotiated by:Read the answer and worked solution →Under Sections 11-12, an 'inland instrument' is one drawn or made in India and:Read the answer and worked solution →An inland instrument that is subsequently indorsed in a foreign country:Read the answer and worked solution →A 'foreign instrument' is:Read the answer and worked solution →Under Section 63, when a bill is presented to the drawee for acceptance, he may be allowed:Read the answer and worked solution →

Worked practice questions

'Mr. B, I.O.U. Rs 1,000' is:

  1. A valid cheque
  2. A valid promissory note
  3. A bill of exchange
  4. Not a promissory note, being a mere acknowledgement of debt with no promise to pay
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Correct answer: D. Not a promissory note, being a mere acknowledgement of debt with no promise to pay

An I.O.U. merely acknowledges a debt without an express undertaking to pay it is not a promissory note.

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'I promise to pay B Rs 500 seven days after my marriage with C.' This is:

  1. A bill of exchange
  2. A valid promissory note
  3. Valid if stamped
  4. Invalid, since the promise is conditional on an uncertain event
Show answer and solution

Correct answer: D. Invalid, since the promise is conditional on an uncertain event

A promise to pay must be unconditional marriage with C may or may not happen, so the instrument is not a valid promissory note (contrast a payment on D's death, which is certain).

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A promissory note has how many parties?

  1. One — the maker
  2. Three — drawer, drawee, payee
  3. Four
  4. Two — the maker and the payee
Show answer and solution

Correct answer: D. Two — the maker and the payee

A promissory note has two parties: the maker (who promises to pay) and the payee.

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More Businesslaw topics

Negotiable Instruments Act 1881Nature of ContractsAgencyThe Limited Liability Partnership Act 2008PartnershipContract of Indemnity and GuaranteeBreach of Contract and its RemediesPerformance of Contract