This document discusses presentment, negotiation, and discharge of parties from liabilities regarding negotiable instruments. It first covers presentment, including the meaning of presentment, presentment for acceptance, presentment for sight, and presentment for payment. It discusses the essentials of valid presentment and when presentment is necessary or unnecessary. It then discusses negotiation, including the meaning of negotiation, transfer by negotiation and assignment, endorsement, and instruments obtained unlawfully or for unlawful consideration. Finally, it discusses discharge of parties from liabilities, including discharge of the instrument and discharge of parties. It also briefly mentions material alteration.

1. TOPIC:
A. PRESENTMENT
B. NEGOTIATION
C. DISCHARGE OF PARTIES FROM LIABILITIES

2. A. PRESENTMENT

3. UNDER PRESENTMENT WE WILL STUDY:
Meaning of presentment
 Presentment for acceptance
Presentment for sight
Presentment for payment

4.  MEANING OF PRESENTMENT
PLACING OF NEGOTIABLE INSTRUMENT BEFORE DRAWEE IS CALLED
PRESENTMENT.
THE ACT OF PRESENTING TO AN AUTHORITY A FORMAL STATEMENT OF A MATTER TO BE
DEALT WITH ; SPECIFICALLY: THE NOTICE TAKEN OR STATEMENT MADE BY A GRAND JURY OF
AN OFFENSE FROM THEIR OWN KNOWLEDGE WITHOUT A BILL OF INDICTMENT (AN
ACCUSATION OF WRONGDOING) LAID BEFORE THEM.

5.  PRESENTMENT FOR ACCEPTANCE
PRESENTMENT FOR ACCEPTANCE MEANS THE PRODUCTION OR EXHIBITION OF A
BILL OF EXCHANGE TO A DRAWEE FOR HIS ACCEPTANCE OR PAYMENT. THE BILLS
WHICH ARE PAYABLE ON DEMAND OR WHICH ARE PAYABLE ON FIXED DATE NEED
NOT BE PRESENTED FOR ACCEPTANCE.
HOW ACCEPTANCE IS MADE ?
WHERE A BILL OF EXCHANGE IS DRAWN AND PRESENTED BEFORE THE DRAWEE
AND THE DRAWEE OF THE BILL SIGNIFIES HIS ASSENT IN WRITING TO THE ORDER OF
THE DRAWER BY SIGNING ACROSS THE FACE OF THE BILL WITH OR WITHOUT THE
WORD "ACCEPTED" , THE BILL IS SAID TO HAVE BEEN ACCEPTED.

6.  NECESSARY  NOT NECESSARY
THE PRESENTMENT IS NECESSARY
WHERE :
i. THE BILL IS PAYABLE AT GIVEN TIME AFTER
ACCEPTANCE , OR
ii. THE BILL IS PAYABLE AFTER SIGHT, OR
iii. THE BILL EXPRESSLY STIPULATES THAT IT SHALL BE
PRESENTED FOR ACCEPTANCE BEFORE IT IS
PRESENTED FOR PAYMENT , OR
iv. THE BILL IS MADE PAYABLE AT PLACE OTHER THAN
THE PLACE OF RESIDENCE OR BUSINESS OF THE
DRAWEE.
WHEN PRESENTMENT FOR
ACCEPTANCE IS NOT NECESSARY :
WHERE THE DRAWEE IS ;
i. A DEAD PERSON, OR AN ADJUDICATED
INSOLVENT ,
ii. A FICTITIOUS PERSON , OR
iii. A PERSON INCOMPETENT , AND
iv. WHERE DRAWEE CANNOT , AFTER REASONABLE
SEARCH , BE FOUND , THE BILL IS DISHONORED.

7. (A)TO WHOM
PRESENTMENT CAN BE
MADE
WHEN THE TIME OR PLACE ARE SPECIFIED
THEN WITHIN THAT SPECIFIED TIME OR THAT
SPECIFIED PLACE. WHEN THE TIME IS NOT
SPECIFIED THEN WITHIN A REASONABLE TIME
AND WHEN T HE PRESENTMENT IS NOT
NECESSARY THEN ANY TIME BEFORE
PAYMENT.WHEN THE PLACE IS NOT SPECIFIED
THEN AT DRAWEE'S PLACE OF BUSINESS OF
RESIDENCE.
(B)TIME AND PLACE FOR
PRESENTMENT
a. THE DRAWEE OF THE BILL.
b. THE DRAWEE IN CASE OF NEED.
c. ALL THE DRAWEES WHERE THERE ARE
MORE THAN ONE DRAWEE.
d. LEGAL REPRESENTATIVE OF A
DECEASED DRAWEE.
e. THE OFFICIAL RECEIVER OF OFFICIAL
ASSIGNEE OF AN INSOLVENT DRAWEE.
f. THE AUTHORIZED AGENT OF A
DRAWEE.
g. THE ACCEPTOR FOR HONOR.

8. ESSENTIALS OF A VALID ACCEPTANCE
1) IT MUST BE GIVEN IN WRITING.
2) IT MUST BE SIGNED BY THE DRAWEE OR HIS
AUTHORIZED AGENT.
3) IT MUST APPEAR ON THE FACE OF THE BILL OF
EXCHANGE.
4) IT SHOULD BE PRESENTED FOR ACCEPTANCE ON
SPECIFIED TIME.
5) IT SHOULD BE PRESENT FOR ACCEPTANCE AT
SPECIFIED PLACE.

9. MODES OF ACCEPTANCE
1)GENERAL OR ABSOLUTE ACCEPTANCE-
ACCEPTANCE WITHOUT ANY CONDITION OR
QUALIFICATION,UNCONDITIONAL ACCEPTANCE I.E. ACCEPTANCE WHAT
APPEARS ON THE FACE OF THE BILL
2)QUALIFIED ACCEPTANCE-
ADDS ANY CONDITION OR QUALIFICATION

10. PRESENTMENT FOR ACCEPTANCE WHEN
EXCUSED
SECTIONS 61 AND 91 OF THE ACT ENUMERATE THE INSTANCES WHERE PRESENTMENT IS
EXCUSED.
i. WHEN THE DRAWEE IS A FICTITIOUS PERSON OR ONE INCAPABLE OF CONTRACTING.
ii. WHEN HE CANNOT AFTER REASONABLE SEARCH BE FOUND. (SECTION 61)
iii. WHERE THOUGH THE PRESENTMENT IS IRREGULAR , ACCEPTANCE HAS BEEN REFUSED
ON SOME OTHER GROUND.
iv. WHERE THE DRAWEE IS DEAD , OR INSOLVENT, THE BILL MAY NOT BE PRESENTED FOR
ACCEPTANCE TO HIS LEGAL REPRESENTATIVE OR THE OFFICIAL ASSIGNEE AS THE CASE
MAY BE.

11.  ACCEPTANCE FOR
HONOR OR
ACCEPTANCE SUPRA
PROTEST
 ESSENTIALS OF A VALID
ACCEPTANCE FOR
HONOR
IF A BILL HAS BEEN DISHONORED BY NON ACCEPTANCE
AND HAS BEEN DULY NOTED OR PROTESTED FOR SUCH
DISHONOR , ANY PERSON , BEFORE IT'S OVERDUE , WHO IS
NOT A PARTY ALREADY LIABLE UNDER THE BILL MAY , WITH
THE CONSENT OF THE HOLDER OF THE BILL , BY WRITING
ON THE BILL ,ACCEPT THE BILL FOR THE HONOR OF ANY OF
THE PARTIES LIABLE ON IT . THE OBJECT OF SUCH AN
ACCEPTANCE OR HONOR IS TO PROTECT THE CREDIT OF
THE PARTY LIABLE ON THE BILL AND TO PREVENT LEGAL
PROCEEDINGS BEING TAKEN AGAINST HIM.
1. MUST BE MADE AFTER NOTING OR PROTESTING AND
IN NO CASE BEFORE IT.
2. MUST BE MADE WITH THE CONSENT OF THE HOLDER.
3. CAM BE MADE ONLY BY THE PERSON WHO IS NOT
LIABLE ON THE BILL.
4. MUST BE SIGNED BY THE ACCEPTOR OF HONOR.
5. MUST BE MADE BEFORE THE BILL IS OVERDUE.

12.  PRESENTMENT FOR SIGHT
IN A PROMISSORY NOTE OR BILL OF EXCHANGE , THE EXPRESSIONS "AT SIGHT" AND
"ON PRESENTMENT" MEANS ON DEMAND. THE EXPRESSION "AFTER SIGHT" IN A
PROMISSORY NOTE MEANS AFTER PRESENTMENT FOR SIGHT AND IN A BILL OF
EXCHANGE, IT MEANS AFTER ACCEPTANCE OR NOTING FOR NON ACCEPTANCE ,
PROTEST FOR NON ACCEPTANCE.
PRESENTMENT SHOULD BE MADE WITHIN A REASONABLE TIME AFTER THE NOTE IS
MADE AND SHOULD BE DONE ON A BUSINESS DAY DURING BUSINESS HOURS.

13.  PRESENTMENT FOR PAYMENT
THE PRESENTATION OF THE INSTRUMENT TO THE PERSON PRIMARILY LIABLE FOR THE PURPOSE OF DEMANDING
AND RECEIVING PAYMENT..
VALID PRESENTMENT FOR PAYMENT MEANS PRESENTMENT :
i. ON THE PROPER DAY
ii. AT THE PROPER HOUR
iii. BY THE PROPER PERSON
iv. AT THE PROPER PLACE
v. TO THE PROPER PERSON AND
vi. IN THE PROPER MANNER.

14. RULES REGARDING PRESENTMENT FOR
PAYMENT :
1). MUST BE PRESENTED BY OR ON BEHALF THE
HOLDER .(SECTION 74)
2) IF AUTHORIZED BY AGREEMENT OR USAGE
PRESENTMENT THROUGH POST OFFICE , BY MEANS
OF A REGISTERED LETTER IS SUFFICIENT.(SECTION
64)
3) MUST BE MADE DURING THE USUAL HOURS OF
BUSINESS AND MUST BE MADE OR ACCEPTED AT A
SPECIFIED PLACE.(SECTION 65)
5) A NEGOTIABLE INSTRUMENT PAYABLE ON DEMAND
MUST BE PRESENTED WITHIN A REASONABLE TIME AFTER
IT IS RECEIVED BY THE HOLDER.(SECTION 74)
6) A PROMISSORY NOTE OR A BILL OF EXCHANGE MADE
PAYABLE AT A SPECIFIED PERIOD AFTER DATE OR SIGHT
THEREOF MUST BE PRESENTED FOR PAYMENT AT
MATURITY.(SECTION 66)
4) A PROMISSORY NOTE PAYABLE AT INSTALLMENTS
MUST BE PRESENTED FOR PAYMENT ON THE THIRD DAY
AFTER THE DATE FIXED FOR PAYMENT OF EACH
INSTALLMENT.(SECTION 67)
4) A NEGOTIABLE INSTRUMENT PAYABLE ON
DEMAND MUST BE PRESENTED WITHIN A
REASONABLE TIME AFTER IT IS RECEIVED BY THE
HOLDER.(SECTION 74)

15.  WHEN DELAY IN PAYMENT IS EXCUSED
( SECTION 75 – A ) :
WHEN DELAY IS CAUSED BY CIRCUMSTANCES BEYOND THE CONTROL OF THE
HOLDER.
 PAYMENT FOR HONOR :
WHEN A BILL HAS BEEN NOTED OR PROTESTED FOR NON PAYMENT , ANY PERSON
MAY PAY IT FOR THE HONOR OF ANY PARTY LIABLE ON THE BILL.
 ESSENTIALS OF A VALID PAYMENT FOR HONOR :
a) BILL MUST HAVE BEEN PREVIOUSLY NOTED OR PROTESTED FOR NON PAYMENT.
b) THE PERSON PAYING OR HIS AGENT MUST DECLARE BEFORE A NOTARY PUBLIC.
c) SUCH DECLARATION MUST BE RECORDED BY THE NOTARY PUBLIC.

16. WHEN PRESENTMENT IS UNNECESSARY :
a. WHEN PRESENTMENT IS INTENTIONALLY
PREVENTED .
b. BUSINESS PLACE CLOSED .
c. NO PERSON AT THE PLACE OF PAYMENT .
d. WHEN THE PAYER CANNOT BE FOUND .
e. WHERE THE DRAWEE IS FICTITIOUS PERSON .

17. B . NEGOTIATION

18. UNDER NEGOTIATION WE WILL STUDY :
 Meaning of negotiation
 Transfer by negotiation
 Transfer by assignment
 Endorsement
 Instruments obtained by unlawful means or for
unlawful consideration

19.  MEANING OF NEGOTIATION:
ACCORDING TO ROBBINS:
"A PROCESS IN WHICH TWO OR MORE PARTIES EXCHANGE GOODS AND
SERVICES AND ATTEMPT TO AGREE UPON THE EXCHANGE RATE FOR THEM . "
A GIVE AND TAKE DECISION MAKING PROCESS INVOLVING INTERDEPENDENT
PARTIES WITH DIFFERENT PREFERENCES.

20. WHEN A PROMISSORY NOTE , BILL OF EXCHANGE OR CHEQUE IS TRANSFERRED
TO ANY PERSON SO AS TO CONSTITUTE THAT PERSON THE HOLDER THEREOF ,
THE INSTRUMENT IS SAID TO BE NEGOTIATED. ( SECTION 14 )
REQUIRES TWO CONDITIONS TO BE FULFILLED -
1. MUST BE A TRANSFER OF THE INSTRUMENT TO ANOTHER PERSON .
2. TRANSFER MUST BE MADE IN SUCH A MANNER AS TO CONSTITUTE THE
TRANSFER THE HOLDER OF THE INSTRUMENT.
 TRANSFER BY NEGOTIATION :

21. MODES OF NEGOTIATION :
 NEGOTIATION BY DELIVERY (SECTION 47) -
WHERE A PROMISSORY NOTE OR A BILL OF EXCHANGE OR A CHEQUE IS
PAYABLE TO A BEARER, IT MAY BE NEGOTIATED BY DELIVERY THEREOF .
 BY ENDORSEMENT AND DELIVERY (SECTION 48) –
A PROMISSORY NOTE , A CHEQUE OR A BILL OF EXCHANGE PAYABLE TO ORDER
CAN BE NEGOTIATED ONLY BY ENDORSEMENT AND DELIVERY.

22.  TRANSFER BY ASSIGNMENT :
WHEN THE HOLDER OF A NEGOTIABLE INSTRUMENT SELLS HIS
RIGHT TO ANOTHER PERSON WITHOUT ENDORSING IT .

24.  WHO MAY NEGOTIATE
THE MAKER , THE DRAWEE,
THE PAYEE AND THE
ENDORSEE.
 DURATION OF NEGOTIABILITY
( SECTION 60 )
UNTIL IT HAS BEEN PAID OR SATISFIED
ON BEHALF OF THE MAKER , DRAWEE ,
OR ACCEPTOR , AT OR AFTER
MATURITY .

25.  ENDORSEMENT
MEANING OF ENDORSEMENT :
UNDER NEGOTIABLE INSTRUMENTS ACT IT
MEANS , THE WRITING OF ONE'S NAME ON
THE BACK OF THE INSTRUMENT OR ANY
PAPER ATTACHED TO IT WITH THE INTENTION
OF TRANSFERRING THE RIGHTS THEREIN.
THE PERSON WHO ENDORSES OR PUTTING
SIGNATURE AT THE BACK OF THE
INSTRUMENT IS CALLED THE ENDORSER .
THE PERSON TO WHO, THE INSTRUMENT IS
ENDORSED IS CALLED THE ENDORSEE .
ALLONGE – A SEPARATE PAPER WHEN
SIGNED AND ATTACHED WITH THE
INSTRUMENT.

26. ESSENTIALS OF A VALID ENDORSEMENT:
1) MUST BE ON THE INSTRUMENT.
2) MUST BE MADE BY THE MAKER OR HOLDER OF THE INSTRUMENT.
3) MUST BE SIGNED BY THE ENDORSER.
4) AN ENDORSEMENT SHOULD FOR THE ENTIRE AMOUNT OF THE INSTRUMENT.
5) NO SPECIFIC FORM OF WORDS ARE NECESSARY FOR ENDORSEMENT .

27. CLASSES OF
ENDORSEMENT:
Blank or general
Special or full
Partial
Restrictive
Conditional
Sans recourse
Facultative
Sans frais'

28.  BLANK OR GENERAL ENDORSEMENT
( SECTION 16 AND 54 )
ENDORSER SIGNS HIS NAME WITHOUT MENTIONING THE NAME OF
THE PERSON TO WHOM THE CHERIE IS ENDORSED.

29.  SPECIAL OR FULL ENDORSEMENT
( SECTION 16 )
THE ENDORSER WRITES NOT ONLY THE NAME OF ENDORSER ,
BUT ALSO THE NAME OF ENDORSEE .

30.  RESTRICTIVE ENDORSEMENT
(SECTION 50)
AN ENDORSEMENT IN WHICH THE ENDORSER RESTRICTS THE
FURTHER NEGOTIATION (TRANSFERABILITY) .

31.  PARTIAL ENDORSEMENT
(SECTION 56)
IN PARTIAL ENDORSEMENT THE NEGOTIABLE INSTRUMENT IS ENDORSED FOR
PART OF THE AMOUNT.
SUCH ENDORSEMENT IS NOT VALID .

32.  CONDITIONAL ENDORSEMENT
IT CONTAINS AN ORDER TO PAY ONLY WHEN A CONDITION EXPRESSLY LAID
DOWN BY THE ENDORSER IS MET WITH .

33.  SANS RECOURSE ENDORSEMENT
THE ENDORSER FREES HIMSELF FROM ANY LIABILITY LIKE
DISHONOR OF INSTRUMENT BY WRITING THE WORD "SANS
RECOURSE "AFTER WRITING THE NAME OF THE ENDORSEE .

34.  FACULTATIVE ENDORSEMENT
WHERE THE ENDORSER EXTENDS HIS LIABILITY OR ABANDONS SOME
RIGHT UNDER A NEGOTIABLE INSTRUMENT.

35.  SANS FRAIS' ENDORSEMENT
SANS FRAIS MEANS "WITHOUT EXPENSE" .
ENDORSER DOESN'T ANY EXPENSE TO BE INCURRED ON HIS ACCOUNT
ON THE INSTRUMENT.THAT MEANS HE IS LIABLE FOR THE AMOUNT OF
THE INSTRUMENT ONLY AND NOT LIABLE FOR ANY ADDITIONAL
EXPENDITURE LIKE NOTING AND PROTESTING CHARGES .

36. EFFECTS OF ENDORSEMENT
A. THE PROPERTY OF INSTRUMENT IS TRANSFERRED FROM
ENDORSER TO ENDORSEE .
B. THE ENDORSEE GETS RIGHT TO NEGOTIATE THE INSTRUMENT
FURTHER .
C. THE ENDORSEE GETS THE RIGHT TO SUE IN HIS OWN NAME TO ALL
OTHER PARTIES .

37. CANCELLATION
OF
ENDORSEMENT
WHEN THE HOLDER OF A
NEGOTIABLE INSTRUMENT ,
WITHOUT THE CONSENT OF THE
ENDORSER DESTROYS OR IMPAIRS
THE ENDORSER'S REMEDY AGAINST
PRIOR PARTY , THE ENDORSER IS
DISCHARGED FROM LIABILITY TO THE
HOLDER TO THE SAME EXTENT AS IF
THE INSTRUMENT HAD BEEN PAID AT
MATURITY.(SECTION 40)
NEGOTIATION BACK
WHERE A BILL IS RE – ENDORSED
TO A PREVIOUS ENDORSER .
THE HOLDER CANNOT ENFORCE
PAYMENT AGAINST AN
INTERMEDIARY PARTY WHOM HE
WAS PREVIOUSLY LIABLE .

38. INSTRUMENTS OBTAINED BY UNLAWFUL
MEANS OR FOR UNLAWFUL
CONSIDERATION
LOST INSTRUMENTS
STOLEN INSTRUMENTS
INSTRUMENTS OBTAINED BY FRAUD
INSTRUMENTS OBTAINED FOR AN UNLAWFUL CONSIDERATION
FORGED INSTRUMENTS
FORGED ENDORSEMENT
INSTRUMENTS WITHOUT CONSIDERATION

39. C . DISCHARGE OF PARTIES FROM
LIABILITY

40. UNDER DISCHARGE OF PARTIES FROM
LIABILITIES WE WILL STUDY :
 Discharge of instrument
 Discharge of party or parties
 Material alteration

41. DISCHARGE OF INSTRUMENT
A NEGOTIABLE INSTRUMENT IS SAID TO BE DISCHARGED WHEN ALL RIGHTS OF ACTION UNDER IT
ARE COMPLETELY EXTINGUISHED AND WHEN IT CEASE TO BE NEGOTIATED . AFTER IT IS
DISCHARGED THE RIGHTS AGAINST ALL THE PARTIES THERETO COME TO AN END AND NO PARTY ,
EVEN A HOLDER , IN DUE COURSE ,CAN CLAIM THE AMOUNT OF THE INSTRUMENT FROM ANY
PARTY THERETO.

42. DIFFERENT MODES OF DISCHARGE OF
INSTRUMENT:
1. BY PAYMENT IN DUE COURSE - IF PAYMENT IS DUE BY THE PARTY WHICH IS
PRIMARILY LIABLE TO PAY .
2. BY EXPRESS WAIVER - WHEN THE HOLDER OF INSTRUMENT AT OR AFTER ITS
MATURITY ABSOLUTELY AND UNCONDITIONALLY RENOUNCED OR GIVES UP HIS
RIGHT AGAINST ALL THE PARTIES TO THE INSTRUMENT.
3. BY CANCELLATION – WHEN AN INSTRUMENT IS INTENTIONALLY CANCELLED BY
THE HOLDER OR HIS AGENT AND THE CANCELLATION IS APPARENT THEREON.
4. BY MATERIAL ALTERATION- WHEN THE PARTY PRIMARILY LIABLE IS DISCHARGED
BY MATERIAL ALTERATION IN THE INSTRUMENT.

43. DISCHARGE OF A PARTY OR PARTIES
THE MAKER , ACCEPTOR OR ENDORSER OF A NEGOTIABLE INSTRUMENT MAY
BE DISCHARGED FROM LIABILITY IN THE FOLLOWING WAYS –
EFFECTS OF MATERIALALTERATION
MAKES THE INSTRUMENT VOID THAT IS IT DISCHARGES THE
INSTRUMENT ITSELF .
1). DISCHARGE BY CANCELLATION
2). DISCHARGE BY RELEASE .
4). DISCHARGE BY DELAY IN PRESENTMENT OF CHEQUE
3). DISCHARGE BY MATERIAL ALTERATION

44.  MATERIALALTERATION
IT MAY BE DEFINED AS ANY CHANGE WHICH ALTERS THE VERY NATURE OF AN INSTRUMENT.
THUS, IT IS THE ALTERATION , WHICH CHANGES AND DESTROYS THE LEGAL IDENTITY OF THE
ORIGINAL INSTRUMENT AND CAUSES IT TO SPEAK A DIFFERENT LANGUAGE IN LEGAL EFFECT
FROM THAT WHICH IT ORIGINALLY SPOKE .
INSTANCES OF MATERIAL ALTERATION –
i. ALTERATION OF THE DATE OF THE INSTRUMENT.
ii. ALTERATION OF THE AMOUNT PAYABLE .
iii. ALTERATION IN THE TIME AND PLACE OF THE INSTRUMENT.
iv. ALTERATION BY THE ADDITION OF NEW PARTY .
v. TEARING OF THE MATERIAL PART OF THE INSTRUMENT.

45. INSTANCES WHERE
ALTERATION DOES NOT
AMOUNT TO MATERIAL
ALTERATION
I. ALTERATION ADD TO CARRY OUT THE
ORIGINAL INTENTION OF THE
PARTIES .
II. ALTERATION MADE WITH THE
CONSENT OF PARTIES .
III. ALTERATION MADE BEFORE THE
INSTRUMENT IS ISSUED .
IV. CORRECTION OF A MISTAKE OR OF A
CLERICAL ERROR .
ALTERATION AUTHORIZED BY
THE ACT
1) FILLING BLANKS IN INCHOATE
INSTRUMENTS . (SECTION 20)
2) CONVERSION OF BLANK ENDORSEMENT
INTO ENDORSEMENT IN FULL . (SECTION
49)
3) MAKING ACCEPTANCE CONDITIONAL .
(SECTION 86)
4) CROSSING OF AN UNCROSSED CHEQUE ,
5) CONVERSION OF GENERAL CROSSING TO
SPECIAL CROSSING . (SECTION 125)

46. THANK YOU