NEGOTIABLE INSTRUMENTS LAW

(Part 1)

Welcome to the new school year!

Negotiable Instruments Law (NIL) is one of the subjects that are quite a challenge to
comprehend for many, even under the regular classroom setup, so how it will be under the new
normal will be quite exciting to find out.hehe

Since I am asthmatic and living with seniors, I will be holding classes online until further notice. I
commit to do my very best in guiding you in navigating and understanding NIL, especially
considering under the new normal, and I ask for your equal commitment in coming to class
prepared so we will all be on the same page during discussions.

Please bear in mind that unlike other subjects that can be studied in order (i.e based on article
number), the arrangement of the sections in the NIL is quite jumbled up, hence the need to
read some provisions and concepts in advance.

We will formally start discussions next week (Week starting August 17); as preparation for the
discussion and oral recitations, please follow the guide below, bearing in mind that these are
GUIDE QUESTIONS in our study of Negotiable Instruments to help you with the flow, but you
are expected to be able to fully discuss the enumerated concepts and so be sure to read the
related discussions and annotations.

Thanks and keep safe everyone!

MiSHi

Instructions: Read the discussions on Sections 1-29 of the Negotiable Instruments Law (NIL),
making sure to cross-refer concepts to related articles in the NIL and to other laws. Sections
beyond Section 29 that must be read in advance in relation to the discussion are specified
below.

1. What are Negotiable Instruments?

2. What are its primary characteristics? What is its most important feature?
3. What is the significance of negotiable instruments in commerce?/What is the main
purpose of the law in creating “negotiable instruments”?
4. What are the requisites for negotiability? Discuss fully.
5. A promissory note is not dated. How does this affect its negotiability?
6. Who are the parties to a negotiable instrument?
7. When is an instrument considered payable to bearer?
8. Differentiate an obligation with a condition versus one with a period.
9. Define “consideration” in relation to negotiable instruments.
10. What constitutes a “holder for value”? Explain the significance of the concept of a
“holder for value” in relation to negotiable instruments.
11. What is the effect of failure of consideration? Does this affect negotiability?
12. Who is an accommodation party? What are his obligations?
13. What is/are the requirement/s for the agent to be considered properly authorized to
sign a negotiable instrument in behalf of his principal?
14. What are the requisites in order for an agent to escape personal liability on a negotiable
instrument?
15. What is meant by “negotiation” (sec. 30)? Compare this with ordinary
transfer/assignment
16. How is a promissory note negotiated (sec. 30)?
17. Who is a holder in due course (sec. 52)? What is the importance of determining whether
or not a holder is one in due course or not?
18. Differentiate real vs. personal defenses
19. What is the effect if an instrument is incomplete but delivered (e.g amount was left
blank)? Is the instrument and its transfer valid?
20. How about an instrument that is complete but undelivered, but somehow came to the
possession of a holder in due course? What are its effects? What are the rights of the
holder in due course, if any?