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A minor endorses and delivers a bill of exchange to a third person. Under section 26 of the Negotiable Instruments Act, 1881, whom does the negotiation bind?

Question and options

A minor endorses and delivers a bill of exchange to a third person. Under section 26 of the Negotiable Instruments Act, 1881, whom does the negotiation bind?

  1. All parties to the bill, including the minor

  2. All parties to the bill except the minor

  3. No party, because a minor's negotiation is void

  4. The minor, once he ratifies it on attaining majority

Answer and explanation

Correct answer: B - All parties to the bill except the minor

Section 26 of the Negotiable Instruments Act, 1881 allows a minor to draw, endorse, deliver and negotiate an instrument so as to bind all parties except himself. The negotiation is therefore effective against the other parties, while the minor incurs no liability, and an agreement by a minor cannot be ratified on attaining majority.

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