THE NEGOTIABLE INSTRUMENTS ACT 1881
The word ‘Negotiable’ means transferable from one person to another in return for consideration. The word ‘Instrument’ means a written document by which a right is created in favour of certain person. Thus, a negotiable instrument is a document which entitles a person to a certain sum of money and which is transferable from one person to another by mere delivery or by endorsement and delivery. The terms delivery and endorsement has been explained subsequently in this chapter. The law relating to negotiable instruments is dealt in the Negotiable Instruments Act 1881. This Act speaks about promissory note, bills of exchange and cheques.