Section 20 of NIA : Section 20: Inchoate Stamped Instruments

Explanation using Example

Imagine John signs a stamped paper that doesn't specify an amount and hands it to Mary, with the understanding that she will fill in the details for a loan of $5,000. By doing this, John has given Mary the authority to complete the instrument with the agreed amount. If Mary fills in $5,000 and transfers the note to Alex, a holder in due course, John is obligated to pay Alex the full amount. However, if Mary acts dishonestly and writes $10,000 instead, John is still liable to Alex for the $10,000, assuming Alex had no knowledge of John's original intent and accepted the note in good faith. If someone not a holder in due course, like Mary's friend Tom, tries to claim $10,000 from John, he can only recover the $5,000 that John had intended to authorize.