Step 1: Define Negotiable Instruments.
- Negotiable instruments are transferable documents ensuring payment of a specified sum to the bearer or a designated party.
- Examples include: Bills of exchange, Promissory notes, and Cheques.
- While a Letter of Credit is a banking tool in trade, it lacks the transferability characteristic of negotiable instruments.
| List-I (Reasons) | List-II (Examples) |
|---|---|
| (A) Contract contingent on marriage | (I) A and B contract to marry each other. Before the marriage, A goes mad. |
| (B) Repudiation of a voidable contract | (II) A agrees to sell B 100 bags of wheat. Before delivery, the government bans private trading. |
| (C) Supervening impossibility | (III) A contracts to give a loan if B marries C. C dies unmarried. |
| (D) Subsequent illegality | (IV) A forces B to sell his car worth 15,00,000 for 5,00,000. B rescinds the contract. |