CAF-4 · Chapter 14 · Question 5 of 8
Evaluate the validity of this note: 'I promise to pay Adil or order Rs. 5,000 and 500 shares of Sigma Limited.'
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Invalid, because a promissory note must be for the payment of money only.
Explanation
A key essential of a promissory note is that the undertaking must be to pay a 'certain sum of money only'. Adding shares or goods invalidates the instrument.
More Negotiable instruments MCQs
- Q7Mujahid owes Rs. 500,000 to Shoaib and wants to issue a time instrument to settle the debt. Which document should Mujahid draft and sign?
- Q8Is the statement 'Nauman, I shall be highly obliged if you make it convenient to pay Rs. 100,000 to Mahreen' a valid bill of exchange?
- Q1Which of the following acts contains the law relating to promissory notes, bills of exchange, and cheques in Pakistan?
- Q2A promissory note is defined as an instrument in writing containing an unconditional ________ to pay a certain sum of money.
- Q3Evaluate the validity of the following statement written on a document: 'I promise to pay Khalid or order Rs. 12,000 six days after Saad’s…