Which instrument contains an unconditional written order to a named non-bank drawee to pay a named payee at a future date?
Question and options
Which instrument contains an unconditional written order to a named non-bank drawee to pay a named payee at a future date?
Cheque
Promissory note
Bill of exchange
Warehouse receipt
Answer and explanation
Correct answer: C - Bill of exchange
Under section 5 of the Negotiable Instruments Act, 1881 a bill of exchange is a signed, unconditional written order directing a certain person to pay a certain sum to a certain person or order. A promissory note under section 4 is a promise by the maker, not an order, and a cheque under section 6 must be drawn on a specified banker and is payable on demand. A warehouse receipt is a document of title to goods, not an order to pay money.
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