Question Tag: Bills of Exchange

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  • 5 Marks

BL – May 2015 – L1 – SB – Q6a – Negotiable Instruments

Explain two types of Bills of Exchange.

Bills of Exchange are used in several ways, including for payment of debts and provision of credits.

Required:
Explain briefly any TWO types of Bills of Exchange. (5 Marks)

 

Two types of Bills of Exchange are:
i. Inland Bill: This is a bill either drawn or payable within Nigeria.

ii. Foreign Bill: This is a bill drawn outside Nigeria or outside the Nigerian territory.

  • 6 Marks

BL – May 2015 – L1 – SB – Q5c – Negotiable Instruments

Explain three key characteristics of a negotiable instrument.

A negotiable instrument is a written promise to pay money.

Required:
Explain THREE characteristics of a negotiable instrument. (6 Marks)

The three characteristics of a negotiable instrument are:

  1. Transferability by delivery: A negotiable instrument can be transferred by mere delivery if payable to the bearer, or by delivery and endorsement if payable to order.
  2. Title: The transferee of a negotiable instrument can acquire a good title and can sue in their own name.
  3. Presumption of consideration: It is presumed that consideration has been given for the instrument unless proven otherwise.

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