Negotiable Instruments – Page 3

EOB – APR 2024 – L1 – Q3 – Features of Negotiable Instruments, Indemnity vs Counter Indemnity, Definitions from Act 930

List features of negotiable instruments; explain difference between indemnity and counter indemnity; define bank and deposit-taking business per Act 930.

Question

As a student of Banking, list any six (6) features/characteristics of Negotiable Instruments. (6 marks)

b. Explain the main difference between an Indemnity and a Counter Indemnity Agreement. (6 Marks)

c.WithWith reference to the Banks and Specialized Taking Institutions Act ( ActAct 930), define the following:

i. Bank (4 marks) ii. Deposit Taking Business (Total: 20 marks)

Answer

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Tags: Act 930, Bank Definition, Counter Indemnity, Deposit Taking Business, Indemnity, Negotiable Instruments
Level: Level 1

Topic: Banking Law 1989 (PNDC Law 225) – Main Features
Series: APR 2024

EOB – APR 2024 – L1 – Q1 – Fill in the Blanks on Key Banking Concepts and Instruments

Fill in the blanks for various banking terms related to negotiable instruments, liabilities, AML processes, financial markets, instruments, central bank roles, and customer-bank relationships in lending scenarios.

Question

Fill in the blank spaces with the correct answersDuring the staff orientation ceremony, there were so many questions about the Banking System. One of them relates to a document that is a Negotiable Instrument issued from a creditor to a debtor, but it is not channelled through the Clearing System, however, it can be discounted. This is known as………..a………… Kojo was amazed to be told that one can assume a Secondary Liability for a debt, default and miscarriage of another person and he is known as…………b…………. As part of the Anti-Money Laundering processes, …………c…………. is the process of identifying your clients and checking they are who they say they are. It was stated that Financial Instruments to be sold could either be for a shortH term or long term and the market for Short Term Securities is called……………d…………. Whereas the market where the instruments are initially traded before they can be re-sold is also known as…………..e………… It is also refreshing to note that there exist a Financial Instrument which is also short term in nature under which credit worthy borrowers are able to borrow directly from corporate bodies. It is known as…………f…………. During. During the discussion it came to light that as a Lender of Last Resort the………..g…………. decided to increase the rates at which it provided loans to the other banks.One of the customers exclaimed that as a…………..h……….., he has deposited his land document at the bank for Safe Keeping, and should he decide to use it to secure a business Loan Facility he will be known as………….i……….. and the bank will beand………j…………..

Answer

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Tags: Anti-Money Laundering, Commercial Paper, Lender of Last Resort, Money market, Mortgagee, Mortgagor, Negotiable Instruments, Primary Market, Safe Keeping
Level: Level 1

Topic: Securities for Advances
Series: APR 2024

PBL – APR 2014 – L1 – Q1 – Promissory Notes, Bills of Exchange, and Endorsements

Definition of promissory note, differences from bill of exchange, requirements for valid endorsement, and promises/admissions of endorser.

Question

A) Define a promissory note.

B) Indicate the differences between a promissory note and a bill of exchange 12 marks

C) Outline any four requirements of a valid endorsement.

D) The endorser of a bill of exchange makes certain promises and admissions to the holder of a bill. Describe briefly these promises and admissions.

Answer

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Tags: Bill of Exchange, Endorsement, Holders Rights, Negotiable Instruments, Promissory Note
Level: Level 1

Topic: Cheques and other Means of Payment
Series: APRIL 2014

BL – Nov 2020 – L1 – SB – Q5d – Negotiable Instruments

Explain different cheque crossing types and define negotiable instruments.

Question

Crossing of cheques has legal implications in banking transactions, and a cheque is a type of negotiable instrument.

Required:
i. A cheque instruction to “pay Ronke the sum of N50,000.00” without crossing the face of the cheque with two parallel lines.
ii. “Pay Andrew N100,000” with two parallel lines traversing the face of the cheque.
iii. “Pay Mary N150,000” with two parallel lines with Congo Bank written in between the two parallel lines on the face of the cheque.
iv. “Pay Ngozi N200,000” and by cheque with two parallel lines and the words “account payee only” written in between the two parallel lines.
v. Define negotiable instruments.

Answer

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Tags: Banking Transactions, Cheques, Crossing, Negotiable Instruments, Payment Instructions
Level: Level 1

Topic: Negotiable Instruments
Series: NOV 2020

BL – Nov 2020 – L1 – SA – Q15 – Negotiable Instruments

Objective question on identifying the legal status of a payee in possession of a bill after providing consideration.

Question

15. A payee that is in possession of a bill he obtained after giving consideration to the drawer is known in law as
A. Holder for value
B. Holder in due course
C. Drawee
D. Holder of bill
E. Holder for the meantime

Answer

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Tags: Bill of Exchange, Holder in Due Course, Law of Negotiability, Negotiable Instruments
Level: Level 1

Topic: Negotiable Instruments
Series: NOV 2020

BL – May 2012 – L1 – SA – Q19 – Negotiable Instruments

Identify the document used to secure payment in commercial transactions.

Question

The documents that are used in commercial and financial transactions to secure payment of money are:

A. ATM Cards
B. Bills of Lading
C. Payment Vouchers
D. Negotiable Instruments
E. Credit Cards

Answer

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Tags: Business Law, Commercial Law, Negotiable Instruments
Level: Level 1

Topic: Negotiable Instruments
Series: MAY 2012

BL – May 2012 – L1 – SA – Q7 – Negotiable Instruments

Identifying conditions under which a bank may be excused from paying a customer's cheque.

Question

A bank may be excused from the obligation to pay a customer’s cheque EXCEPT when:

A. There is an unsigned alteration on the cheque
B. The cheque is stale
C. The drawer’s death comes to the notice of the bank
D. The bank does not have enough cash
E. There is an effective countermand

Answer

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Tags: Banking Law, Business Law, Negotiable Instruments
Level: Level 1

Topic: Negotiable Instruments
Series: MAY 2012

BL – Nov 2011 – L1 – SB – Q6 – Negotiable Instruments

Understanding the characteristics of negotiable instruments, banker's duties, revocation of wills, and parties to a bill of exchange.

Question

(a) State FOUR characteristics of a negotiable instrument. (4 Marks)

(b) Mr. Eddie is a customer of Perfect Bank Limited. He issued a cheque for the sum of N20,000 to Mr. Jossy. At the time of issuing the cheque, his account was in credit to the tune of N150,000. The cheque was dishonored by the bank. Mr. Eddie wants to sue the bank. You are required to advise Mr. Eddie. (5 Marks)

(d) State the parties to a Bill of Exchange. (3 Marks)

Answer

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Tags: Banker-Customer Relationship, Bill of Exchange, Negotiable Instruments, Revocation, Will
Level: Level 1

Topic: Negotiable Instruments
Series: NOV 2011

BL – Nov 2011 – L1 – SA – Q2 – Negotiable Instrument

Identifying the negotiable instrument that becomes payable on demand as part of a banker and customer relationship.

Question

What is the type of negotiable instrument that becomes payable on demand as part of the relationship between a banker and a customer?

Answer

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Tags: Banking, Cheques, Negotiable Instruments, Payable on Demand
Level: Level 1

Topic: Negotiable Instruments
Series: NOV 2011

BL – Nov 2011 – L1 – SA – Q1 – Negotiable Instruments

The question tests knowledge of the term used when an endorser specifies to whom a bill is payable

Question

Where an endorser signs the Bill and expressly states to whom or to whose order the Bill is now payable, the endorsement is referred to as …………………………………….

Answer

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Tags: Banking, Bill of Exchange, Endorsement, Negotiable Instruments
Level: Level 1

Topic: Negotiable Instruments
Series: NOV 2011

BL – Nov 2013 – L1 – SA – Q17 – Negotiable Instruments

Identifies a bill lacking in material particulars.

Question

A bill lacking in some material particular is known as

A. Inland bill
B. Incomplete or inchoate bill
C. Promissory bill
D. Esoteric bill
E. Accelerated bill

Answer

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Tags: Bills of Exchange, Multiple Choice, Negotiable Instruments
Level: Level 1

Topic: Negotiable Instruments
Series: NOV 2013

BL – Nov 2015 – L1 – SA – Q13 – The Nigerian Legal System

Law allowing transfer of legal title to negotiable instruments by delivery.

Question

The law that allows the transfer of legal title to cheques, promissory notes etc by mere handing over or mere delivery is
A. Bills of Exchange Act
B. Banks and other Financial Institutions Act
C. Bills of Lading Act
D. Companies Income Tax Act
E. Central Bank of Nigeria Act

Answer

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Tags: Legal Title, Multiple Choice, Negotiable Instruments, Transfer
Level: Level 1

Topic: The Nigerian Legal System
Series: NOV 2015

BL – Nov 2015 – L1 – SA – Q12 – Law Relating to Banking

Court jurisdiction for trying offences under the Money Laundering Act.

Question

The court that has the exclusive jurisdiction to try offences under the Money Laundering (Prohibition) Act is the
A. State High Court
B. Magistrate Court
C. Federal High Court
D. Sharia Court of Appeal
E. Criminal Court

Answer

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Tags: Legal Title, Multiple Choice, Negotiable Instruments, Transfer
Level: Level 1

Topic: Law Relating to Banking
Series: NOV 2015

BL – May 2018 – L1 – SA – Q16 – Negotiable Instruments

Identify the instruction given by the drawer to stop payment of a cheque.

Question

The instruction given by the drawer to the drawee to stop the payment of a cheque is
A. Countermand
B. Injunction
C. Memo
D. Order
E. Signal

Answer

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Tags: Banking, Cheques, Negotiable Instruments
Level: Level 1

Topic: Negotiable Instruments
Series: MAY 2018

BL – Nov 2014 – L1 – SB – Q4a – Negotiable Instruments

: Explain the legal issues surrounding the issuance of a cheque that was dishonored due to insufficient funds in Suzee’s account.

Question

Suzee operates a current account with Life Bank Plc. On Monday, she was informed that the credit balance on her account was N125,000. She anticipated that on Tuesday, her mother would lodge cash of N65,000 into her account, but the mother did not do so.
On Wednesday, she issued a cheque in favour of Timmy for the sum of N140,000. On Friday, when Timmy presented the cheque, it was returned unpaid because the credit balance on Suzee’s account still remained N125,000. Timmy is aggrieved and alleges that an offence has been committed.

Required:
Explain the legal issues surrounding Suzee’s act of issuing that cheque.
(Total 6 Marks)

Answer

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Tags: Banking, Cheque Issuance, Dishonored Cheque, Negotiable Instruments
Level: Level 1

Topic: Negotiable Instruments
Series: NOV 2014

BL – Nov 2022 – L1 – SB – Q1d – Negotiable Instruments

Identifying circumstances under which a bill of exchange may be discharged.

Question

A bill of exchange may be discharged under several circumstances.

Required:
State four circumstances under which a bill of exchange may be discharged.

Answer

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

Topic: Negotiable Instruments
Series: NOV 2022

BL – Nov 2022 – L1 – SA – Q17 – Negotiable Instruments

Determining the legal term for a bill not accepted within the specified time.

Question

A bill duly presented to the drawee by the payee but not accepted within the specified time is said to be:

A. Disallowed
B. Disregarded
C. Dismissed
D. Discountenanced
E. Dishonoured

Answer

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Tags: Bills, Dishonour, Negotiable Instruments
Level: Level 1

Topic: Negotiable Instruments
Series: NOV 2022

BL – Nov 2023 – L1 – SB – Q3d -Negotiable Instruments

Explains two types of cheques commonly used in business transactions

Question

Business today is facilitated by financial instruments.
Required:
Explain briefly TWO of the following:
i. Bearer Cheque
ii. Order Cheque
iii. Holder
iv. Open Cheque (5 Marks)

Answer

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Tags: Business Transactions, Cheques, Negotiable Instruments
Level: Level 1

Topic: Negotiable Instruments
Series: NOV 2023

BL – Nov 2023 – L1 – SA – Q17 – Negotiable Instruments

This question asks about the condition when a bill of exchange is considered discharged.

Question

When every right of action on a bill of exchange has been extinguished, the bill is said to be
A. Nullified
B. Negotiated
C. Discharged
D. Activated
E. Vanquished

Answer

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

Topic: Negotiable Instruments
Series: NOV 2023

BL – Nov 2019 – L1 – SB – Q6c – Negotiable Instruments

Explanation of endorsement and negotiation of a bill of exchange.

Question

A Bill of Exchange is a type of negotiable instrument.
Required:
Explain briefly, the following:
i. Endorsement of a Bill; and
ii. Negotiation of a Bill.

Answer

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Tags: Bill of Exchange, Endorsement, Negotiable Instruments, Negotiation
Level: Level 1

Topic: Negotiable Instruments
Series: NOV 2019

Question Tag: Negotiable Instruments

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EOB – APR 2024 – L1 – Q3 – Features of Negotiable Instruments, Indemnity vs Counter Indemnity, Definitions from Act 930

List features of negotiable instruments; explain difference between indemnity and counter indemnity; define bank and deposit-taking business per Act 930.

You're reporting an error for "EOB – APR 2024 – L1 – Q3 – Features of Negotiable Instruments, Indemnity vs Counter Indemnity, Definitions from Act 930"

EOB – APR 2024 – L1 – Q1 – Fill in the Blanks on Key Banking Concepts and Instruments

Fill in the blanks for various banking terms related to negotiable instruments, liabilities, AML processes, financial markets, instruments, central bank roles, and customer-bank relationships in lending scenarios.

You're reporting an error for "EOB – APR 2024 – L1 – Q1 – Fill in the Blanks on Key Banking Concepts and Instruments"

PBL – APR 2014 – L1 – Q1 – Promissory Notes, Bills of Exchange, and Endorsements

Definition of promissory note, differences from bill of exchange, requirements for valid endorsement, and promises/admissions of endorser.

You're reporting an error for "PBL – APR 2014 – L1 – Q1 – Promissory Notes, Bills of Exchange, and Endorsements"

BL – Nov 2020 – L1 – SB – Q5d – Negotiable Instruments

Explain different cheque crossing types and define negotiable instruments.

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BL – Nov 2020 – L1 – SA – Q15 – Negotiable Instruments

Objective question on identifying the legal status of a payee in possession of a bill after providing consideration.

You're reporting an error for "BL – Nov 2020 – L1 – SA – Q15 – Negotiable Instruments"

BL – May 2012 – L1 – SA – Q19 – Negotiable Instruments

Identify the document used to secure payment in commercial transactions.

You're reporting an error for "BL – May 2012 – L1 – SA – Q19 – Negotiable Instruments"

BL – May 2012 – L1 – SA – Q7 – Negotiable Instruments

Identifying conditions under which a bank may be excused from paying a customer's cheque.

You're reporting an error for "BL – May 2012 – L1 – SA – Q7 – Negotiable Instruments"

BL – Nov 2011 – L1 – SB – Q6 – Negotiable Instruments

Understanding the characteristics of negotiable instruments, banker's duties, revocation of wills, and parties to a bill of exchange.

You're reporting an error for "BL – Nov 2011 – L1 – SB – Q6 – Negotiable Instruments"

BL – Nov 2011 – L1 – SA – Q2 – Negotiable Instrument

Identifying the negotiable instrument that becomes payable on demand as part of a banker and customer relationship.

You're reporting an error for "BL – Nov 2011 – L1 – SA – Q2 – Negotiable Instrument"

BL – Nov 2011 – L1 – SA – Q1 – Negotiable Instruments

The question tests knowledge of the term used when an endorser specifies to whom a bill is payable

You're reporting an error for "BL – Nov 2011 – L1 – SA – Q1 – Negotiable Instruments"

BL – Nov 2013 – L1 – SA – Q17 – Negotiable Instruments

Identifies a bill lacking in material particulars.

You're reporting an error for "BL – Nov 2013 – L1 – SA – Q17 – Negotiable Instruments"

BL – Nov 2015 – L1 – SA – Q13 – The Nigerian Legal System

Law allowing transfer of legal title to negotiable instruments by delivery.

You're reporting an error for "BL – Nov 2015 – L1 – SA – Q13 – The Nigerian Legal System"

BL – Nov 2015 – L1 – SA – Q12 – Law Relating to Banking

Court jurisdiction for trying offences under the Money Laundering Act.

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BL – May 2018 – L1 – SA – Q16 – Negotiable Instruments

Identify the instruction given by the drawer to stop payment of a cheque.

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BL – Nov 2014 – L1 – SB – Q4a – Negotiable Instruments

: Explain the legal issues surrounding the issuance of a cheque that was dishonored due to insufficient funds in Suzee’s account.

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BL – Nov 2022 – L1 – SB – Q1d – Negotiable Instruments

Identifying circumstances under which a bill of exchange may be discharged.

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BL – Nov 2022 – L1 – SA – Q17 – Negotiable Instruments

Determining the legal term for a bill not accepted within the specified time.

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BL – Nov 2023 – L1 – SB – Q3d -Negotiable Instruments

Explains two types of cheques commonly used in business transactions

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BL – Nov 2023 – L1 – SA – Q17 – Negotiable Instruments

This question asks about the condition when a bill of exchange is considered discharged.

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BL – Nov 2019 – L1 – SB – Q6c – Negotiable Instruments

Explanation of endorsement and negotiation of a bill of exchange.

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