Ambiguous Instruments

An instrument, which in form or terms is such that it may either be treated as a bill of exchange or as a promissory note, is an ambiguous instrument. In the following cases, the instrument is taken as ambiguous;

(a) Where drawer and drawee are the same person.

(b) Where drawee is a fictitious person

(c) Where drawee is a person incapable of entering into a contract

Inchoate Instruments

The term inchoate instruments means an incomplete instrument. According to Section-20, "when one person signs and delivers to another a paper stamped in accordance with the law relating to negotiable instruments either wholly blank or having written thereon an incomplete negotiable instrument he thereby gives prima facie authority to the holder thereof to make or complete, as the case may be, upon it a negotiable instrument for any amount specified therein, and not exceeding the amount covered by the stamp. the person so signing shall be liable upon such instrument, in the capacity in which he signed the same, to any holder in due course for such amount. Provided that no person other than a holder in due course shall recover from the person delivering the instrument anything in excess the amount intended by him to be paid there-under".