Hello
One of the essential characteristic of a Negotiable Instrument is that it must be payable to either order or bearer. Could you please explain me the meaning of "order" and "bearer"?
Thank You
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Negotiable instrument
Replies (2)
"Order" - Written instrument that allows the holder to be paid money or to do something
For ex: A banker's Postal order i.e., an order to bank / Post office to pay money
Bearer: Person who has a cheque for payment on demand
For ex; This cheque is payable to the bearer i.e, to the person who presents it at a bank.
Now i hope you understood the meaning of the words Order & Bearer.
If it is payable to order then only the person named in the instrument can receive payment on the instrument.
If it is payablr to bearer, then anyone who presents the instrument can recieve payment on it.
Hope its clear.
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