- Instrument inward writing : A banking corporation fit must hold upward necessarily inward writing. Oral orders to the banking corporation to pay approximately coin create non institute a cheque.
- Contains an Unconditional Order : A banking corporation fit is an companionship to a item banking corporation to pay a item heart together with soul of money. It should non comprise whatever words of asking similar “please” or “kindly”. It is likewise non necessary that the words ‘order’ must shape a business office of the writing because the give-and-take ‘pay’ itself denotes an order. The companionship must hold upward unconditional. Any conditional companionship does non institute a cheque.
- Drawn on a Specified Banker : A banking corporation fit is ever drawn on a item banker only. Generally the total advert together with address of the banking corporation is printed on the cheque. The banking corporation fit is encashable at the banking corporation on which it is drawn. Even a banking corporation fit drawn on a item branch cannot hold upward encashed at approximately other branch of the same banking corporation unless at that topographic point is an understanding betwixt the parties.
- Payee to hold upward for sure : To hold upward a valid cheque, it must hold upward payable to a for sure specified soul or to his agent or the bearer at that topographic point off. Sir John Paget rightly pointed out inward this watch that, “A normal banking corporation fit is 1 inward which at that topographic point is a drawer, a drawee banker together with a payee or no “payee but bearer.”
- Order to Pay a Certain heart together with soul of Money ” A banking corporation fit is usually drawn for a definite heart together with soul of money. Indefiniteness has no house inward monetary transactions. That is the modern bankers insist on writing the total both inward fugures together with words.
- Payable on Demand alone : A banking corporation fit is ever payable alone on demand. It is non necessary to purpose the give-and-take ‘on demand’ equally inward the illustration of need bill. As per Sec. nineteen of the Negotiable Instruments Act, unless a fourth dimension constituent is specified yesteryear the drawer, the banking corporation fit is alwayas payable on demand.
- Signed yesteryear the Drawer : To hold upward valid, a banking corporation fit should hold upward signed yesteryear a client who draws it. The drawer usually puts his signature at the bottom correct mitt corner of the cheque. When this signature differs from the specimen signature, the banking corporation fit volition hold upward dishonored.