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

Which statement about local usages relating to hundis under the short title section of the Negotiable Instruments Act, 1881 is correct?

Nothing in the Act affects any local usage relating to an instrument in an oriental language, such as a hundi. This saving is subject to a proviso under which the parties may exclude the usage by suitable words in the instrument.

  1. AThe Act overrides every local usage relating to hundis
  2. BNothing in the Act affects any local usage relating to an instrument in an oriental languageCorrect
  3. CLocal usages apply only if the instrument is written in English
  4. DLocal usages can never be excluded by the parties

Explanation

The Act saves local usage relating to instruments in an oriental language. However, the proviso lets parties exclude such usages by words in the instrument showing intent to be governed by the Act, so the 'never excluded' option is wrong.

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