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    Question

    An Inchoate Instrument is:

    A Bill of Exchange Correct Answer Incorrect Answer
    B Ambiguous Instrument Correct Answer Incorrect Answer
    C Incomplete or blank negotiable instrument but duly signed Correct Answer Incorrect Answer
    D Hundi Correct Answer Incorrect Answer

    Solution

    An incomplete instrument is called an inchoate instrument. Section 20 of the Negotiable Instruments Act provides that when one person signs and delivers to another a paper stamped in accordance with the law relating to negotiable instruments then in force in India and either wholly blank or having written thereon an incomplete negotiable instrument, he thereby give prima facie authority to the holder thereof to maker to complete, as the case may be, upon it a negotiable instrument for an amount specified therein and not exceeding the amount covered by the stamp. The person so signing shall be liable upon such instrument in the capacity in which he signed the same, to any holder in due course for such amount.

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