Multiple choice

In case of bill of exchange, the property in merchandise does not pass to the buyer until he accepts the bill of exchange.

  1. True

  2. False

  3. Partly true

  4. Cannot say
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A Correct answer
Explanation

Under a documentary bill arrangement, property in goods passes conditionally - it only transfers to the buyer upon acceptance of the bill of exchange. Until acceptance, ownership remains with the seller, even if goods are with the buyer. This protects the seller's security interest.

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