Each writing below is signed by its maker and promises to pay ₹10,000 to Maya. Which term prevents it from being a promissory note under sections 4 and 5 of the Negotiable Instruments Act, 1881?
Question and options
Each writing below is signed by its maker and promises to pay ₹10,000 to Maya. Which term prevents it from being a promissory note under sections 4 and 5 of the Negotiable Instruments Act, 1881?
Payment one month after the death of the maker's father
Payment on demand, with interest at 12 per cent a year
Payment to Maya or to her order on a fixed date
Payment seven days after the maker's marriage to Ravi
Answer and explanation
Section 4 of the Negotiable Instruments Act, 1881 requires an unconditional undertaking, and its illustrations treat a promise to pay after the maker's marriage as conditional, because the marriage may never happen. Under section 5, a promise payable on an event certain to happen, such as a person's death, is not conditional though its time is uncertain, and a sum stays certain although it includes future interest.
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