Skip to content

CSEET · Business Laws and Management · Elements of Law relating to Negotiable Instruments

A hundi written in an oriental language is governed by a local usage. The body of the instrument contains words showing that the legal relations of the parties shall be governed by the Negotiable Instruments Act, 1881. What is the effect?

The local usage is excluded and the Act governs. The proviso to the short-title section allows parties to oust local usage by words in the instrument's body indicating that their legal relations shall be governed by the Negotiable Instruments Act.

  1. AThe local usage continues to apply because the Act never affects local usages
  2. BThe instrument becomes void as it is in an oriental language
  3. CThe local usage is excluded and the Act governs the parties' legal relationsCorrect
  4. DThe local usage applies to the drawer only, and the Act to the payee

Explanation

The proviso to the saving clause says local usages may be excluded by words in the body of the instrument showing intention that the Act governs. Hence the usage is excluded. The first option ignores this proviso.

Did you get it right without looking?

One question tells you little. A timed set on Elements of Law relating to Negotiable Instruments shows your real accuracy, how long you take and where you lose marks.

Practise Elements of Law relating to Negotiable InstrumentsFree diagnostic mock

More Elements of Law relating to Negotiable Instruments questions