Negotiable Instruments – Page 3

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 – SB – Q3c – Negotiable Instruments

Explaining the two main parties involved in an insurance contract.

Question

Explain the TWO main parties to an insurance contract.

Answer

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Tags: Insurance Contract, Insured, Insurer
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 2011 – L1 – SA – Q8 – Negotiable Instruments

Identify which type of acceptance does not qualify as a qualified acceptance of a Bill.

Question

A qualified acceptance of a Bill may occur in any of the following ways EXCEPT by:
A. Conditional acceptance
B. Partial acceptance
C. Restriction of payment to a place
D. Signature
E. Stipulation of time of payment

Answer

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

Topic: Negotiable Instruments
Series: NOV 2011

BL – Nov 2012 – L1 – SA – Q17 – Negotiable Instruments

Identify which of the options is not a negotiable instrument.

Question

Which of the following is NOT a negotiable instrument?

A. Credit card
B. Dividend warrants
C. Treasury bills
D. Traveller’s cheques
E. Bearer bonds

Answer

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Tags: Credit Cards, Financial Transactions, Negotiable Instruments
Level: Level 1

Topic: Negotiable Instruments
Series: NOV 2012

BL – May 2018 – L1 – SB – Q5 – Negotiable Instruments

Comment on the validity of bills and state the rights of an unpaid seller.

Question

a. A bill of exchange must conform with the requirements of the law (the Bills of Exchange Act 1990) before it could be valid.

Required:
Comment on the validity of the following Bills of Exchange:
(i) Please pay Kwame the sum of N1,000,000.00; (2 Marks)
(ii) Pay James N5,000.00, provided the receipt form at the foot hereof is duly signed; (2 Marks)
(iii) Pay Jossy N10,000.00 ten days after the death of his father. (2 Marks)

b. An unpaid seller under a contract of sale of goods has two classes of rights, namely: rights against the goods and rights against the buyer.

Required:
State THREE rights of an unpaid seller over the goods. (6 Marks)

c. As a general rule, all persons of full age may sue or be sued in tort.

Required:
State FOUR exceptions to the above-mentioned general rule. (4 Marks)

d. James, a Nigerian who is resident in the U.S.A., intends to transfer a sum of 100,000 dollars to Nigeria for investment.

Required:
Advise James on the steps to be taken to avoid breaching the provisions of the Money Laundering (Prohibition) Act of 2011. (4 Marks)

Answer

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Tags: Bills of Exchange, Tort, Unpaid Seller
Level: Level 1

Topic: Negotiable Instruments
Series: MAY 2018

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

BL – May 2023 – L1 – SB – Q2D – Negotiable Instruments

Explain special crossing on a cheque and identify narrations on a specially crossed cheque.

Question

A cheque may be crossed in different ways. Required:

i. Explain briefly “special crossing” on a cheque. (2 Marks)

ii. State TWO narrations that may be placed on such a crossed cheque. (2 Marks)

Answer

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Tags: Banking Law, Cheques, Legal Principles, Negotiable Instruments
Level: Level 1

Topic: Negotiable Instruments
Series: MAY 2023

BL – May 2023 – L1 – SA – Q7 – Negotiable Instruments

Identify the correct term for the person who orders payment through a cheque.

Question

The person who orders money to be paid on his behalf to a named person through a cheque is called:

A. Payee
B. Payer
C. Drawer
D. Drawee
E. Payor

Answer

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Tags: Banking Law, Cheque, Drawer, Negotiable Instruments
Level: Level 1

Topic: Negotiable Instruments
Series: MAY 2023

Topic: Negotiable Instruments

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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.

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

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

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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.

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BL – Nov 2011 – L1 – SB – Q3c – Negotiable Instruments

Explaining the two main parties involved in an insurance contract.

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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.

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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

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BL – Nov 2011 – L1 – SA – Q8 – Negotiable Instruments

Identify which type of acceptance does not qualify as a qualified acceptance of a Bill.

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BL – Nov 2012 – L1 – SA – Q17 – Negotiable Instruments

Identify which of the options is not a negotiable instrument.

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BL – May 2018 – L1 – SB – Q5 – Negotiable Instruments

Comment on the validity of bills and state the rights of an unpaid seller.

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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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BL – May 2023 – L1 – SB – Q2D – Negotiable Instruments

Explain special crossing on a cheque and identify narrations on a specially crossed cheque.

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BL – May 2023 – L1 – SA – Q7 – Negotiable Instruments

Identify the correct term for the person who orders payment through a cheque.

You're reporting an error for "BL – May 2023 – L1 – SA – Q7 – Negotiable Instruments"

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