Negotiation Back {Sec. 90}

Negotiation Back   {Sec. 90}

Meaning

When an endorser, after he has negotiated an instrument, again becomes a holder before its maturity, the instrument is said to be negotiated back to that holder.

Effect:-

1. In a negotiation back, none of the intermediate holder / endorsers is liable to the holder.
2. The general rule, that a holder in due course may sue all prior parties to the instrument does not apply.
3. However, where a prior party has excluded its liability on the instrument and the negotiable instrument is negotiated back to him, he may sue all intermediate endorsers.