Meaning:-
An alteration is called as material alteration if it alters-
*the character or operation (i.e. the legal effect) of a negotiable instrument, or
*the rights and liabilities of the parties to a negotiable instrument.
| What is material alteration? | What is NOT Material Alteration? |
| Alteration regarding-
(a)Date, (b)Time of payment, (c)Place of payment, (d)Sum payable (e)Opening a crossed cheque, (f)Relationship between parties, (g)Converting an order cheque into a bearer cheque.
|
(a)Filling blank of the instrument, (b)Conversion of blank endorsement into endorsement in full, (c)Crossing of Cheque, (d)Conversion a General Crossing into Special Crossing, like addition of word “A/c payee” or “Not Negotiable”. (e)Cancelling the word bearer and making cheque payable to order. (f)Alternation made with the consent of the parties. |
Effect of a material alteration {sec. 87}
*Any material alteration of a negotiable instrument renders the same void as against any
One who is a party there at the time of making such alteration and does not consent thereto.
*But, a material alteration is valid, if it was made so as to carry out common intention of the original parties.
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