BL – May 2014 – L1 – SA – Q18 – Negotiable Instruments

Understanding the various ways a bill can be discharged.

Question

A bill can be discharged in any of the following ways EXCEPT by:
A. Payment in due course
B. Physical destruction of the bill
C. Acceptor becoming holder of the bill
D. Renunciation
E. Cancellation

Answer

B. Physical destruction of the bill

Explanation:
The physical destruction of a bill does not, by itself, discharge it. A bill is discharged through actions such as payment, renunciation, or when the acceptor becomes the holder. Destruction without formal cancellation does not eliminate the obligations under the bill.

Tags: Bills of Exchange, Discharge, Negotiable Instruments
Level: Level 1

Topic: Negotiable Instruments
Series: MAY 2014

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