Section 47 of NIA : Section 47: Negotiation By Delivery

Explanation using Example

Imagine John has a cheque that is payable to bearer, which means whoever holds the cheque can claim the money. John owes Rachel $500 and gives her the cheque as payment. Rachel can simply take the cheque and present it to the bank to collect the money. This is an example of how the cheque is negotiated by delivery.

Example: John hands the cheque to Rachel, and she becomes the holder of the cheque with the right to receive the amount. No endorsement or additional documentation is needed because the cheque is payable to bearer.