Distinction between Negotiation and Assignment:-
| Basis |
Negotiation |
Assignment |
| Applicable Act | If a negotiable instrument is transfer by way of negotiation, Negotiable Instrument Act, 1881 applies. | Where any right is transfereed by way of assignment, the Transfer of Property Act applies. |
| Meaning | Negotiation means transfer of a negotiable instrument to any other person so as to constitute that person the holder of such negotiable instrument. | Transfer of a right to receive the payment of a debt by one person (viz., assignee) to another person (viz., assignee) by way of a written document is called as assignment. |
| Scope | Negotiation can be made for transferring negotiable instrument only. | Assignment can be made of any right. |
| Method or manner | A bearer instrument can be negotiated merely by deliver, and an order instrument can be negotiated by endorsement and delivery. | Assignment is valid only if it is made in writing and is signed by the assignor. |
| Notice | Notice of negotiation is not required to be given to any party. | Notice of assignment must be given by the assignee to the debtor. |
| Consideration | It is presumed that every negotiable instrument was negotiated for consideration. | There is no such presumption in case of assignment. |
| Burden of proof | The other party has to prove that negotiation was without any consideration. | The assignee has to prove that there some consideration. |
| Better title | The transferee of a negotiable instrument acquires a title better than that of the transferor, i.e; he becomes a holder in due course. | The assignee does not acquire a title better than that of the assignor. |
| Stamp duty | Negotiation does not require payment of stamp duty. | Assignment requires payment of stamp duty. |
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