Question

Material Alteration
Which of the following act will not be treated as material alteration in relation to negotiable instrument?

• A. Alteration of the date of the instrument
• B. Alteration of the sum payable
• C. Alteration of the place of payment
• D. Correction of a mistake

Answer 1

Answer: (D)

Correction of a mistake

The term ‘material alteration‘ indicates alteration or change in the material parts of the instrument. It may be defined as any change, which alters the very nature of the instrument. Thus, it is the alteration, which changes and destroys the legal identity of the original instrument and causes it to speak a different language in legal effect from that which it originally spoke.

Any alteration is said to be material alteration if there is ;

1. Alteration of the date of the instrument
2. Alteration of the amount payable
3. Alteration in time of payment.
4. Alteration of the place of payment
5. Alteration of rate of interest or any change of party thereto, if any
6. Tearing of the material part of the instrument
7. Where a bill is accepted generally, the insertion of a place of payment
8. Addition of a new party to the instrument
9. Addition of words to a bill of exchange endorsed in blank so as to convert the same into special endorsement.