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BILLS OF EXCHANGE ACT, 1882
99 of 1882
18th August, 1882
An Act to codify the law relating to Bills of Exchange, Cheques and Promissory Notes Received the Royal Assent, 18th August, 1882 Be it enacted by the Queen's Most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled and by the authority of the same, as follows:
PART 01: PRELIMINARY
SECTION 01: SHORT TITLE
This Act may be cited as the Bills of Exchange Act, 1882.
SECTION 02: INTERPRETATION OF TERMS
In this Act, unless the context otherwise requires,- "Acceptance" means an acceptance completed by delivery of notification. "Action" includes a counter-claim and set-off. "Banker" includes a body of persons whether incorporated or not, who carry on the business of banking. "Bankrupt" includes any person whose estate is vested in a trustee or assignee under the law for the time being in force relating to bankruptcy. "Bearer" means the person in possession of a bill or note which is payable to bearer. "Bill" means bill of exchange and "note" means promissory note. "Delivery" means transfer of possession, actual or constructive, from one person to another. "Holder" means the payee or endorsee of a bill or note who is in possession of it or the bearer thereof. "Endorsement" means an endorsement completed by delivery. "Issue" means the first delivery of a bill or note, complete in form of a person who takes it as a holder. "Person" includes a body of persons, whether incorporated or not. "Value" means valuable consideration. "Written" includes printed, and "writing" includes print.
PART 02: BILL OF EXCHANGE
Form and Interpretation Capacity and Authority of PartiesThe consideration for a billNegotiation of BillsGeneral duties of the holderLiabilities of partiesDischarge of billAcceptance and payment for honourLost instrumentsBill in a setConflict of laws
SECTION 03: BILL OF EXCHANGE DEFINED
(1) A bill of exchange is an unconditional order in writing, addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand at fixed or determinable future time, a sum certain in money to or to the order of a specified person, or to bearer.
(2) An instrument which does not comply with these conditions, or which orders any act to be done in addition to the payment of money, is not bill of exchange.
(3) An order to pay out of a particular fund is not unconditional within the meaning of this section, but an unqualified order to pay, coupled with (a) an indication of a particular fund out of which the drawee is to reimburse himself or a particular account to be debited with the amount, or (b) a statement of the transaction which gives rise to the bill, is unconditional.
(4) A bill is not invalid by reason-
(a) that it is not dated ;
(b) that it does not specify the value given, or that any value has been given therefore;
(c) that is does not specify the place where it is drawn or the place where it is payable.
SECTION 04: INLAND AND FOREIGN BILLS
(1) An inland bill is a bill which is or on the face of it purports to be (a) both drawn and payable within the British Islands, or (b) drawn within the British Islands upon some person resident therein. Any other bill is a foreign bill. For the purposes of this Act, "British Island" means any part of the United Kingdom of Great Britain and Ireland, the Islands of Man, Guernsey, Jersey, Alderney and Sark, and the Islands adjacent to any of them being of the dominions of Her Majesty.
(2) Unless the contrary appears on the face of the bill, the holder may treat it as inland bill.
SECTION 05: EFFECT WHERE DIFFERENT PARTIES TO BILL ARE THE SAME PERSON
(1) A bill may be drawn payable to, or to the order of the drawer, or it may be drawn payable to or to the order of, the drawee.
(2) Where in a bill drawer and drawee are the same person or where the drawee is a fictitious person or a person not having capacity to contract, the holder may treat the instrument, at his option, either as a bill of exchange or as a promissory note.
SECTION 6: ADDRESS TO DRAWEE
(1) The drawee must be named or otherwise indicated in a bill with reasonable certainty.
(2) A bill may be addressed to two or more drawees whether they are partners or not, but an order addressed to two drawees in the alternative or to two or more drawees in succession is not a bill of exchange.
SECTION 07: CERTAINTY REQUIRED AS TO PAYEE
(1) Where a bill is not payable to bearer, the payee must be named or otherwise indicated therein with reasonable certainty.
(2) A bill may be made payable to two or more payees jointly, or it may be made payable in the alternative to one or two, or one, or some of several payees. A bill may also be made payable to the holder of an office for the time being.
(3) Where the payee is a fictitious or non-existing person, the bill may be treated as payable to bearer.
SECTION 08: WHAT BILLS ARE NEGOTIABLE?
(1) When a bill contains words prohibiting transfer, or indicating an intention that it should not be transferable it is valid as between the parties thereto, but is not negotiable.
(2) A negotiable bill may be payable either to order or to bearer.
(3) A bill is payable to bearer which is expressed to be so payable, or on which the only or last endorsement is an endorsement in blank.
(4) A bill is payable to order which is expressed to be so payable or which is expressed to be payable to a particular person, and does not contain words prohibiting transfer or indicating an intention that it should not be transferable.
(5) Where a bill either originally or by endorsement is expressed to be payable to the order of a specified person, and not to him or his order it is nevertheless payable to him or his order at his option.
SECTION 09: SUM PAYABLE
(1) The sum payable by a bill is a sum certain within the meaning of this Act, although it is required to be paid-
(a) with interest;
(b) by stated instalments ;
(c) by stated instalments, with a provision that upon default in payment of any instalment the whole shall become due ;
(d) according to an indicated rate of exchange or according to a rate of exchange to be ascertained as directed by the bill.
(2) Where the sum payable is expressed in words and also in figures, and there is a discrepancy between the two, the sum denoted by the words is the amount payable.
(3) Where a bill is expressed to be payable with interest, unless the instrument otherwise provides, interest runs from the date of the bill, and if the bill is undated, from the issue thereof.
SECTION 10: BILL PAYABLE ON DEMAND
(1) A bill is payable on demand-
(a) which is expressed to be payable on demand, or at sight or on presentation; or
(b) in which no time for payment is expressed.
(2) Where a bill is accepted or endorsed when it is overdue, it shall, in regards the acceptor who so accepts, or any endorser who so endorses it, be deemed a bill payable on demand.
SECTION 11: BILL PAYABLE AT A FUTURE TIME
A bill is payable at a determinable future time within the meaning of this Act which is expressed to be payable-
(1) at a fixed period after date or sight ;
(2) on or at a fixed period after the occurrence of a specified event which is certain to happen, though the time of happening may be uncertain. An instrument expressed to be payable on a contingency is not a bill and the happening of the event does not cure the defect.
SECTION 12: OMISSION OF DATE IN BILL PAYABLE AFTER DATE OR ACCEPTANCE AFTER DATE
Where a bill expressed to be payable at a fixed period after date is issued undated, or where the acceptance of a bill payable at a fixed period after sight is undated, any holder may insert therein the true date of issue or acceptance, and the bill shall be payable accordingly :
Provided that (1) where the holder in good faith and by mistake inserts a wrong date, and (2) in every case where a wrong date is inserted if the bill subsequently comes into the hands of a holder in due course, the bill shall not be avoided thereby, but shall operate and be payable as if the date so inserted had been the true date.
SECTION 13: ANTE --DATING AND POST --DATING
(1) Where a bill or an acceptance or any endorsement on a bill is dated, the date shall, unless the contrary be proved, be deemed to be the true date of the drawing, acceptance, or endorsement, as the case may be.
(2) A bill is not invalid by reason only that it is ante-dated or post-dated, or that it bears date on a Sunday.
SECTION 14: COMPUTATION OF TIME OF PAYMENT
Where a bill is not payable on demand, the day on which it falls due is determined as follows:
(1) The bill is due and payable in all cases on the last day of the time of payment as fixed by the bill or, if that is a non-business day, on the succeeding business day.
(2) Where a bill is payable at a fixed period after date, after sight, or after the happening of a specified event, the time of payment is determined by excluding the day from which the time is to begin to run and by including the day of payment.
(3) Where a bill is payable at a fixed period after sight, the time begins to run from the date of the acceptance if the bill be accepted, and from the date of noting or protest if the bill be noted or protested for non-acceptance or for non-delivery.
(4) The term "month" in a bill means calendar month
SECTION 15: CASE OF NEED
The drawer of a bill and any endorser may insert therein the name of a person to whom the holder may resort in case of need, that is to say, in case the bill is dishonoured by non-acceptance or non-payment. Such person is called the referee in case of need. It is in the option of the holder to resort to the referee in case of need or not as he may think fit.
SECTION 16: SPECIAL STIPULATIONS BY DRAWER OR ENDORSER RESTRICTING LIABILITY
The drawer of a bill, and any endorser, may insert therein an express stipulation:
(1) Negativing or limiting his own liability to the holder.
(2) Waiving as regards himself some or all of the holder's duties.
SECTION 17: DEFINITION AND REQUISITES OF ACCEPTANCE
(1) The acceptance of a bill is the signification by the drawee of his assent to the order of the drawer.
(2) An acceptance is invalid unless it complies with the following conditions, namely,-
(a) it must be written on the bill and be signed by the drawee. The mere signature of the drawee without additional words is sufficient;
(b) it must not express that the drawee will perform his promise by any other means than the payment of money.
SECTION 18: TIME FOR ACCEPTANCE
A bill may be accepted-
(1) before it has been signed by the drawer, or while otherwise incomplete;
(2) when it is overdue, or after it has been dishonoured by a previous refusal to accept, or by non-payment.
(3) When a bill payable after sight is dishonoured by non-acceptance, and the drawee subsequently accepts it, the holder, in the absence of any different agreement, is entitled to have the bill accepted as of the date of first presentment to the drawee for acceptance.
SECTION 19: GENERAL AND QUALIFIED ACCEPTANCES
(1) An acceptance is either (a) general, or (b) qualified.
(2) A general acceptance assents without qualification to the order of the drawee. A qualified acceptance in express terms varies the effect of the bill as drawn.
In particular an acceptance is qualified which is-
(a) conditional, that is to say, which makes payment by the acceptor dependent on the fulfilment of a condition therein stated;
(b) partial, that is to say, an acceptance to pay part only of the amount for which the bill is drawn ;
(c) local, that is to say, an acceptance to pay only at a particular specified place: An acceptance to pay at a particular place is a general acceptance, unless it expressly states that the bill is to be paid there only and not elsewhere.
(d) qualified as to time ;
(e) the acceptance of some one or more of the drawees, but not of all.
SECTION 20: INCHOATE INSTRUMENTS
(1) Where a simple signature on a blank stamped paper is delivered by the signor in order that it may be converted into a bill, it operates as a prima facie authority to fill it up as a complete bill for any amount the stamp will cover, using the signature for that or the drawer or the acceptor or an endorser ; and, in like manner, when a bill is wanting in any material particular, the person in possession of it has a prima fade authority to fill up the omission in any way he thinks fit.
(2) In order that any such instrument. when completed may be enforceable against any person who became a party thereto prior to its completion, it must be filled up within a reasonable time and, strictly in accordance with the authority given. Reasonable time, for this purpose, is a question of fact:
Provided that if any such instrument after completion is negotiated to a holder in due course, it shall be valid and effectual for all purposes in his hands and he may enforce it as if it had been filled up within a reasonable time and strictly in accordance with the authority given.
SECTION 21: DELIVERY
(1) Every contract on a bill, whether it be the drawer's, the acceptor's, or an indoeser's, is incomplete and revocable until delivery of the instrument in order to give effect thereto :
Provided that where an acceptance is written on a bill, and the drawee gives notice to or according to the directions of the persons entitled to the bill that he has accepted it, the acceptance then becomes complete and irrevocable.
(2) As between immediate parties, and as regards a remote party other than a holder in due course, the delivery-
(a) in order to be effectual must be made either by or under the authority of the party drawing, accepting or indorsing, as the case may be;
(b) may be shown to have been conditional or for a special purpose only and not for the purpose of transferring the property in the bill : But, if the bill be in the hands of a holder in due course, a valid delivery of the bill by all parties prior to him so as to make them liable to him is conclusively presumed.
(3) Where a bill is no longer in the possession of a party who has signed it as drawer, acceptor or endorser a valid and unconditional delivery by him is presumed until the contrary is proved.
SECTION 22: CAPACITY OF PARTIES
(1) Capacity to incur liability as a party to a bill is co-extensive with capacity to contract :
Provided that nothing in this section shall enable a corporation to make itself liable as drawer, acceptor or endorser of a bill, unless it is competent to it, so to do under the law for the time being in force relating to corporations.
(2) Where a bill is drawn or endorsed by an infant, minor or corporation having no capacity or power to incur liability on a bill, the drawing or endorsement entitles the holder to receive payment of the bill, and to enforce it against any other party thereto.
SECTION 23: SIGNATURE ESSENTIAL TO LIABILITY
-No person is liable as drawer, endorser or acceptor of a bill who has not signed it as such : Provided that-
(1) where a person signs a bill in a trade or assumed name, he is liable thereon as if he had signed it in his own name ;
(2) the signature of the name of a firm is equivalent to the signature by the person so signing of the names of all persons liable as partners in that firm.
SECTION 24: FORGED OR UNAUTHORIZED SIGNATURE
Subject to the provisions of this Act, where a signature on a bill is forged or placed thereon without the authority of the person whose signature it purports to be, the forged or unauthorized signature is wholly inoperative, and no right to retain the bill or to give a discharge therefore or to enforce payment thereof against any party thereto can be acquired through or under that signature, unless the party against whom it is sought to retain or enforce payment of the bill is precluded from setting up the forgery or want of authority :
Provided that nothing in this section shall affect the ratification of an unauthorized signature not amounting to a forgery.
SECTION 25: PROCURATION SIGNATURES
A signature by procuration operates as notice that the agent has but a limited authority to sign, and the principal is only bound by such signature the agent in so signing was acting within the actual limit of his authority.
SECTION 26: PERSON SIGNING AS AGENT OR IN REPRESENTATIVE CAPACITY
(1) Where a person signs a bill as drawer, endorser or acceptor, and adds words to his signature, indicating that he signs for or on behalf of a principal, or in a representative character, he is not personally liable thereon ; but the mere addition to his signature of words describing him as an agent, or as filling a representative character, does not exempt him from personal liability.
(2) In determining whether a signature on a bill is that of the principal or that of the agent by whose hand it is written, the construction most favourable to the validity of the instrument shall be adopted.
SECTION 27: VALUE DEFINED
(1) Valuable consideration for a bill may be constituted by-
(a) any consideration sufficient to support a simple contract ;
(b) an antecedent debt or liability. Such a debt or liability is deemed valuable consideration whether the bill is payable on demand or at a future time.
(2) Where value has, at any time, been given for a bill the holder is deemed to be a holder for value as regards the acceptor and all parties to the bill who became parties prior to such time.
(3) Where the holder of a bill has a lien on it arising either from contract or by implication of law, he is deemed to be a holder for value to the extent of the sum for which he has a lien.
SECTION 28: ACCOMMODATION BILL OR PARTY
(1) An accommodation party to a bill is a person who has signed a bill as drawer, acceptor, or endorser, without receiving value therefore, and for the purpose of lending his name to some other person.
(2) An accommodation party is liable on the bill to a holder for value ; and it is immaterial whether, when such holder took the bill, he knew such party to be an accommodation party or not.
SECTION 29: HOLDER IN DUE COURSE
(1) An holder in due course is a holder who has taken a bill, complete and regular on the fact of it, under the following conditions, namely-
(a) that he became the holder of it before it was overdue, and without notice that it had been previously dishonoured, if such was the fact;
(b) that he took the bill in good faith and for value, and that at the time the bill was negotiated to him he had no notice of any defect in the title of the person who negotiated it.
(2) In particular, the title of a person who negotiates a bill is defective within the meaning of this Act when he obtained the bill, or the acceptance thereof, by fraud, duress, or force and fear, or other unlawful means, or for an illegal consideration, or when he negotiates it in breach of faith or under such circumstances and amount to a fraud.
(3) A holder (whether for value or not), who derives his title to a bill through a holder in due course, and who is not himself a party to any fraud or illegality affecting it, has all the rights of that holder in due course as regards the acceptor and all parties to the bill prior to that holder.
SECTION 30: PRESUMPTION OF VALUE AND GOOD FAITH
(1) Every party whose signature appears on a bill is prima facie deemed to have become a party thereto for value.
(2) Every holder of a bill is prima facie deemed to be a holder in due course ; but if an action on a bill it is admitted or proved that the acceptance, issue, or subsequent negotiation of the bill is affected with fraud, duress, or force and fear, or illegality, the burden of proof is shifted, unless and until the holder proves that, subsequent to the alleged fraud or illegality, value has in good faith been given for the bill.
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