What is an Inchoate Instrument?

Inchoate Instrument means an incomplete instrument. The drawer/ maker/ acceptor/ endorser of a negotiable instrument may sign and deliver the instrument to another person in his such capacity leaving the instrument, either wholly blank or having written on it the word ‘incomplete. Such an instrument is called an inchoate instrument’ and this gives a power to its holder to make it complete by writing any amount either within limits specified therein or within the limits specified by the stamp’s affixed on it. The principle of this rule of an inchoate instrument is based on the principle of estoppel.

This type of an instrument enables the mercantile persons to lend their names or credit to others by signing their names on the stamped but incomplete (as to amount) instruments. By signing on inchoate instruments, they bind themselves as makers/ drawers/ acceptors of the same as the case might be.