MUHAMMAD DANISH BIN ABDUL HADI (2020841658)

Question 1

Negotiable instruments can be transferred from one person to another. A bill or any instrument is
negotiable when it is transferred from one persons to another person in such manner as to
constitute the transferee the holder of the bill or Instrument. For examples for negotiable
instruments are traveller cheque and bank draft.

There are many characteristics of negotiable instruments. Firstly, tranferable from one person to
another with or without endorsement. Next the holder can sue in his own name. Other than that,
the transferee who takes it in good faith and for value obtains a good tittle to it even though his
transferor had a defective title or no title at all. Lastly, no notice is needed to be given to the debtor
or issuer of the negotiable instrument.

Question 2

Bearer bill is the bills that are drawn payable to bearer or on which the last endorsement is blank
endorsement. The bill is transfearable by mere delivery without any necessity for endorsement OR
signature. For example, “Pay Ali or bearer”. Ali or any person including thief carrying this bill can get
money from bank.

However, order bill is the bills that are payable to or to order of a specified person without words
prohibiting further transfer. The bill requires valid endorsement in order to complete a transfer. For
example, Pay Ali or order". Ali must sign behind this bill if he wants to give the bill to other person.

Question 3

There are three types of endorsement. Firstly, blank endorsement. It is the signature of the person
holding on the bill with no further instructions. In this case, the bill can be passed to anyone without
further endorsement.

Next, special endorsement. Specifies the name of the transferee and is thus payable to the named
endorsee or his order. The endorsee may further negotiate it by endorsement and delivery. Lastly,
restrictive endorsement. This endorsement prevents further negotiation of the bill. The endorse will
only have the right to receive payment on the bill.
Question 4

There are many differences between BOE and cheque. Firstly, BOE can be drawn upon any person
while cheque must be drawn upon a banker only (Paying bank). Besides that, BOE can be made
payable at a fixed or determinable future while cheque payable on demand. Next, BOE must be
presented for payment when due or the drawer will be discharged while cheque can be presented
for payment within 6 months from the date issue.

Furthermore, BOE can not be crossed while the cheque may be crossed. Other than that, BOE
required to be endorsed by the payee before it is presented for payment while. the cheque technical
speaking, need not to be endorsed by payee especially Bearer cheque. Lastly, the BOE a bill when
accepted, the acceptor is primarily Iiable to the holder while cheque the drawer is the party
primarily liable if the cheque is rejected.

Question 5

The first one, is statutory protection. Section 85 BEA 1949 where a banker in good faith and without
negligence when collecting cheques from a customer. As such bank will not incur any liability to the
true owner.

Next, defence of Holder in due course According Section 29 BEA 1949. It is teen known as holder for
value. The bank would acquire a good title to the cheque if it become a holder in the course by
giving value (consider the cheque good) for the cheque in good faith. Lastly, indemnity from
customer. Customer indemnified the bank for any wrong doing or liabilities incurred in the
reasonable performance of the duty. Normally bank requires customer to sign an Indemnity form.