Question

1. Explain the distinction between an assignment of contractual rights and a negotiable instrument.  The acceptance of cheques for payment creates risk for the businesses that accepts them. The use of cheques for payment also creates risks for businesses paying for services or supplies. What are these risks?
2. Briefly discuss the role of a bill of lading and the types of shipping title transfers.

Answer 1

ASSIGNMENT OF CONTRACTUAL RIGHTS :- Assignment of contractual rights means trasferring of all benefits and liabilities of a contract to a stranger. For example : If a person A is selling his business to a person B, so as soon as person B signs the contract of accepting the business of person A , at the same immediate time all the profit/loss , benefits and liabilities of person A will be transfered to person B.

An assignment of contactual rights and benefits may be proceeded in the following ways :

1. Assignment by Act of Party , and
2. Assignment by Operation of Law.

• Assignment by Act of Party :- An assignment by Act of Party is of three types:

1. An assignment made with consent of both the parties as well as with consent of assignee.
2. An assignment made with consent of both the parties but without consent of assignee.
3. An assignment made by party without consent of another party.

• Assignment by Operation of Law :- If both the partie agree to form a new contract or alter the old contract , the original contract need not to be performed.

NEGOTIABLE INSTRUMENT :- A negotiable instrument may Voluntarily be transferred from one person to another in following ways :-

1. By assignment as an actionable claim under transfer of property act, ( Transfer by Assignment ) and
2. By negotiation under Negotiable Instrument Act (Transfer by Negotiation).

RISK OF CHEQUE ACCEPTANCE IN BUSINESS :- There is huge risk of accepting cheques as they are mostly returned due to insufficient fund in bank account of the person who is offering cheque or closed bank accounts. Many small businesses do not have equipment to accept Credit or Debit cards , so they accept cash or cheque to run there business. Following are the Do's and Dont's of accepting cheques :-

1. Accept the cheque signed in front of you. Never accept those cheques who are signed in your absence.
2. Never accept pre-date and post-dated cheques.
3. Never accept a double-endorsed cheque.
4. Always ask for an Indentity card to be shown while accepting the cheque.
5. Never accept cheques who are not written in proper handwriting or have water spots on it or are damaged.

ROLE OF BILL OF LANDING :-  A bill of landing are transferable in nature , it serves the following functions:-

1. It is an acknowledgement that the goods are being loaded.
2. It is an assurity that the goods are loaded as per contract.
3. It serves as Shipment reciept .

Bill of Landing is a leagal document issued by a carrier to a shipper , which consists of quantity of product, destination of where the product is to be delivered.

There are different types of Bill of Landing based upon Negotiable and Non- Negotiable documents:-

1. Straight Bill of Landing.
2. Bearer Bill of Landing.
3. Order Bill of Landing.
4. Switch Bill of Landing.

TYPES OF SHIPPING TITLE TRANSFERS :- This tells us to whome we have to deliver the product, whether the frieght will be provided by customer or it will be beared by the retailer.

1. CIF ( Cost, Insurance , Frieght)
2. CFR ( Cost and Frieght)
3. DAT ( Deliver at Terminal )
4. DAP ( Deliver at Place)