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TN 12th Commerce Solutions Chapter 22 The Negotiable Instruments Act 1881

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Tamilnadu 12th Commerce Solutions Chapter 22 The Negotiable Instruments Act 1881. 12th standard students who want to get full marks in public examinations conducted by the Tamilnadu government must go through this guide. This is a book back answers all in one page. This guide is separated by chapter wise. One mark two mark and all brief questions are answered on this page

TN 12th Commerce Solutions Chapter 22 The Negotiable Instruments Act 1881 Textbook Exercise Questions and Answers

I. Choose the Correct Answer

Question 1.
Negotiable Instrument Act was passed in the year ________
(a) 1981
(b) 1881
(c) 1994
(d) 1818
Answer:
(b) 1881

Question 2.
Negotiable Instrument is freely transferable by delivery if it is a ________ instrument.
(a) Order
(b) Bearer
(c) Both a and b
(d) None of the above
Answer:
(b) Bearer

Question 3.
The transferee of a Negotiable Instrument is the one ________
(a) Who transfer the instrument
(b) On whose name it is transferred
(c) Who enchases it
(d) None of the above
Answer:
(b) On whose name it is transferred

Question 4.
Number of parties in a bill of exchange are ________
(a) 2
(b) 6
(c) 3
(d) 4
Answer:
(c) 3

Question 5.
Section 6 of Negotiable Instruments Act 1881 deals with ________
(a) Promissory Note
(b) Bills of exchange
(c) Cheque
(d) None of the above
Answer:
(c) Cheque

Question 6.
________ cannot be a bearer instrument.
(a) Cheque
(b) Promissory Note
(c) Bills of exchange
(d) None of the above
Answer:
(a) Cheque

Question 7.
When crossing restrict further negotiation ________
(a) Not negotiable crossing
(b) General Crossing
(c) A/c payee crossing
(d) Special crossing
Answer:
(a) Not negotiable crossing

Question 8.
Which endorsement relieves the endorser from incurring liability in the event of dishonour?
(a) Restrictive
(b) Facultative
(c) Sans recourse
(d) Conditional
Answer:
(b) Facultative

Question 9.
A cheque will become stale after ________ months of its date.
(a) 3
(b) 4
(c) 5
(d) 1
Answer:
(a) 3

Question 10.
Document of title to the goods exclude ________
(a) Lorry receipt
(b) Railway receipt
(c) Airway bill
(d) Invoice
Answer:
(d) Invoice

II. Very Short Answer Questions

Question 1.
What is meant by Negotiable Instrument?
Answer:

Question 2.
Define Bill of Exchange.
Answer:
According to section 5 of the Negotiable Instruments Act, “a bill of exchange is an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of a certain person or to the bearer of the – instrument”.

Question 3.
List three characteristics of a Promissory Note.
Answer:

  1. A Promissory Note must be in writing.
  2. It must contain a promise or undertaking to pay.
  3. The promise to pay must be unconditional.
  4. It must be signed by the maker.

Question 4.
What is meant by a cheque?
Answer:
According to section 6 of the Negotiable Instruments Act, 1881 defines a cheque is “a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on-demand”.

Question 5.
Define Endorsement.
Answer:
“Where the maker or the holder of the negotiable instrument signs the same, otherwise than as such maker/for the purpose of negotiation, on the back or face thereof, or on a slip of paper annexed thereto, he is said to endorse the same, and is called the endorser”. – NEGOTIABLE INSTRUMENT ACT 1881, SEC -15

III. Short Answer Questions

Question 1.
Explain the nature of a Negotiable Instrument.
Answer:
Transferability:

Title of the holder free from all defects :
When the instrument is held by the holder in due course in the process of negotiation, it cured of ail defects in the instrument with respect to ownership.

Right of the transferee to sue:
Though a Bill or a promissory note or a cheque represents a debt, the transferee is entitled to sue on the instrument in his own name in case of dishonour without giving notice to the debtor that he has become its holder.

Question 2.
Distinguish between Negotiability and Assignability.
Answer:

Question 3.
What are the characteristics of a bill of exchange?
Answer:

Question 4.
Distinguish between Bill of Exchange and Promissory Note.
Answer:

III. Short Answer Questions

Question 1.
Explain the meaning of the Agreement to sell.
Answer:
The property (ownership or title) in the goods has to pass at a future time or after the fulfillment of certain conditions specified in the contract.

Question 2.
Discuss in detail existing goods.
Answer:
Existing Goods:
These are the goods [stock – in – Trade] owned by the seller at the time of contract of sale or refer to sale by Agents or by pledger.

Specific Goods:
It denotes the goods identified [selected] and agreed upon at the time of contract of sale.

Ascertained Goods:
It is also used as similar in meaning to specific goods.

Unascertained Goods (or) Generic goods:
These are the goods that are not identified [not selected] and agreed upon at the time of contract of sale.

Question 3.
Discuss the implied conditions and warranties in the sale of goods contract.
Answer:
1. Implied conditions:
a) Conditions as to Title:
In the case of a sale, (buyer can assume) the seller has a right to sell the goods.

b) Conditions as to Description:
In a contract of sale by description, there is an implied condition that goods supplied should agree with the description made by the seller.

c) Sale by Sample:
Where goods are sold by showing samples by the seller [eg. cloth, medicine etc] the bulk of goods supplied by the seller should be similar to the samples shown

2. Implied Warranties:
a) Free from any Encumbrances [Obstruction]
The goods bought must not have any charge or obstruction on right in favour of a third party.
If the buyer’s possession is disturbed by any obstruction, he is entitled to claim damages for breach of warranty.

Warranty in the case of Dangerous goods:
The seller Knows, the goods sold by him are dangerous or likely to be dangerous. But the buyer does not know the dangers.

Question 4.
Discuss in detail the rights of an unpaid seller against the buyer personally.
Answer:
Where the Property in the Goods does not pass to the Buyer. Right of an Unpaid Seller against the Buyer Personally:

  1. Suit for price
  2. Suit for Damages for Non-acceptance
  3. Suit for Cancellation of the Contract before the Due Date- Where the buyer cancels the contract before the date of delivery, the seller may either treat the contract as continuing or wait till the due date.
  4. Suit for Interest

IV. Long Answer Questions

Question 1.
Mention the presumptions of Negotiable Instruments.
Answer:
Negotiable Instruments presumed to have been.

Question 2.
Distinguish a cheque and a bill of exchange.
Answer:

Question 3.
Discuss in detail the features of a cheque.
Answer:
Signed by the Drawer:

A certain sum of money only :

Unconditional order:

Drawn on a Specified Banker Only:

The instrument in writing:

Payee to be certain:

Question 4.
What are the requisites for a valid endorsement?
Answer:
Backside:
The endorsement is usually made on the backside of an instrument.

Allonge:
When there is no space for making further endorsements a piece of paper can be attached to the negotiable instrument for this purpose. This piece of paper is called “ALLONGE”.

Delivery:
The endorsement is complete only when delivery of the instrument is made.

Names:
The prefixes (Thiru, Mr., Mrs., Dr., etc….) or suffixes (Avargal, IAS, M.com, etc….) added to the names of the payees or endorsees must be omitted in the endorsement.

The endorsement in Ink:
The endorsement must be in Ink.

Wrongly spelled:
If the endorsee’s name is wrongly spelled [VIRAT – VEER AT] the endorser should sign the same spelled in the instrument and write the correct spelling in brackets.

Signing:
Signing in block letters [sign – RAAJA] does not constitute a regular endorsement.

Duly authorised:
A person who is duly authorised to endorse an instrument must indicate that he is signing in it on behalf of his principal by using such words “for”, or “on behalf of” or “per pro”.

Question 5.
Explain the different kinds of endorsements.
Answer:
When the person signs on the back of the instrument to transfer his interest, it is known as an endorsement. The endorsement are of various types:
(i) Blank or general endorsement:
When the endorser puts his mere signature on the back of an instrument without mentioning the name of the person to whom the endorsement is made, it is called Blank Endorsement

(ii) Endorsement in full or special endorsement:
If the endorser, in addition to his signature, mentions the name of the person to whom it is endorsed, is known as an endorsement in full or special endorsement.

(iii) Conditional endorsement:
When the endorser of a negotiable instrument makes his liability dependent upon the happening of an event which may or may not happen, it is called a conditional endorsement,

(iv) Restrictive endorsement:
When an endorsement restricts or prohibits further negotiability of the instrument, it is called Restrictive Endorsement.

(v) Partial Endorsement:
Where the endorsement seeks to transfer only a part of the amount payable under the instrument, the endorsement is called Partial Endorsement.

TN 12th Commerce Solutions Chapter 21 The Sale Of Goods Act 1930 Additional Questions and Answers

I. Choose the Correct Answer

Question 1.
Section ……………………….. defined the promissory Note.
a) 10
b) 15
c) 4
d) 6
Answer:
c) 4

Question 2.
Grace days allowed to a Bill of exchange for calculation of due date is
(a) 4
(b) 10
(c) 3
(d) 5
Answer:
(c) 3

II. Very Short Answer Questions

Question 1.
What are forms of LPG?
Answer:
Form of Liberalisation (FIL):
Freedom for Expansion: The industries are free to decide their production limits by their own on the basis of the requirement of the markets.

Investment Limit:
The investment limit of the small scale industries has been raised to a crore

Liberalization of Export and Import:
By simplifying the procedures for Imports and Exports the Government wanted to permit the inflow of Goods and Services, capital, HR, and technology.

Question 2.
What are the forms of Globalisation?
Answer:
Forms of Globalization:

III. Short Answer Questions

Question 1.
What are the Advantages and Disadvantages of Globalisation?
Answer:
Advantage: (TIER)

DisAdvantages (DIL)

TN 12th Commerce Guide Book Back Answers
TN 12th Commerce Book Back Answers

Unit 1 Management Process


Unit 2 Financial Markets – I

Unit 3 Financial Markets – II

Unit 4 Human Resource Management

Unit 5 Elements of Marketing

Unit 6 Consumer Protection

Unit 7 Business Environment

Unit 8 The Sale of Goods Act, 1930 and The Negotiable Instruments Act, 1881

Unit 9 Entrepreneurship Development

Unit 10 Company Law and Secretarial Practice

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