Friday, October 12, 2007

NI Act_Practical Problems_8

State whether the following instruments are valid promissory notes : --

(i) I promise to pay Rs. 5,000 to Bon the death of B's uncle provided that D, in his will, gives me a legacy sufficient for the promise of payment of the said sum.
(ii) I hereby acknowledge that I owe X Rs. 5,000 on account of rent due and I agree that the said sum will be paid by me in regular monthly instalments.

(iii) I acknowledge myself indebted to B in Rs. 5,000 to be paid on demand for value received.
(iv) 'X' promises to pay 'Y' a sum of Rs. 10,000 six months after Y's marriage with 'Z'

(i) It is not a promissory note because it does not contain an unconditional promise, the amount being payable only if uncle leaves sufficient legacy.
(ii) Again, it is not a valid promissory note because the amount of monthly instalment is not specified.
(iii) It is a valid promissory note since it fulfils all the requirements of a promissory note as per Section 4 of the Negotiable Instruments Act.
(iv) It is not a valid promissory note, the promise being conditional—the condition being Y's marriage with Z.

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