Question

Classification of Negotiable Instruments
A promissory note or a bill of exchange payable after a fixed period, or after sight, or on specific day, or on the happening of an event which is certain to happen, is known as a/an -

• A. Time instrument
• B. Inland instrument
• C. Foreign instrument
• D. Demand instrument

Answer 1

Answer: (A)

The types of Negotiable instruments are largely determined based upon the scope of definition given to negotiable instruments and specification of the instruments legally recognized as negotiable in that country’s law. A time instrument is payable at a definite future time and the event is certain to happen. For instance, an instrument payable 3 months after date is payable 3 months after the date written on its face.