Commerce Questions and Answers – Part12

111. Define Bill of Exchange?
The negotiable instruments act, 1881 definesa ‘bill of exchang’ as “an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of a certain person or to the bearer of the instrument.

112. What is maturity date?
A bill is said to be matured on the date which it falls due for payment. This date id called the ‘due date’ or the ‘maturity date’ of the bill.

113. What is Days of Grace?
A bill falls due only on the third day after the day on which it is stated to be payable. These extra days allowed for the payment of a bill is called the ‘Days of Grace’.

114. What is Inland Bill?
Bill drawn and made payable in India as well as bill drawn upon a person residing in India is called an Inland Bill.

115. What is Foreign Bill?
A foreign bill is one which is drawn in India and made payable in a foreign country or drawn on one who is a resident of a foreign country.

116. Define Promissory note?
Negotiable instrument act 1881 defines a promissory note as “an instrument in writing containing an unconditional undertaking signed by the maker to pay a certain sum of money only, to or to the order of a certain person”.

117. What is Insurance?
Insurance is a mechanism through which the sufferings of one man is one man is minimized by sharing it with many men.

118. What is Causa Proxima (Proximate Cause)?
According to this docrine when there are several causes, only the proximated or nearest cause should be considered. The distant and remote cause shall be ignored.

119. What is Re-insurance?
Re-insurance means insuring an already insured risk by the insurer. It is done mainly to reduce the risk of the insurance company by sharing it with other companies.

120. What is Double Insurance?
It is entirely different from re-insurance. In this case the insured insures the same subject matter with more than on insurance company.

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