Bills of Exchange Act 1934

1 Interpretation

2 Definition of bill of ex change

3 Inland and foreign bills

4 Effect where different par ties to bill are the same person

5 Indication of drawee

6 Indication of payee

7 Conditions under which bills are negotiable

8 Sums payable by a bill

9 Bill payable on demand

10 Bill payable at a future time

11 Omission of date in bill payable after date

12 Ante-dating and post-dating bill etc

13 Computation of time of payment

14 Referee in case of need

15 Optional stipulations by drawer or indorser

16 Definition and requisites of acceptance

17 Time for acceptance

18 General and qualified ac ceptances

19 Inchoate instruments

20 Delivery of instrument

21 Capacity of parties

22 Signature essential to va lidity

23 Forged or unauthorized signature on a bill

24 Signature by procuration

25 Person signing as agent or in a representative capac ity

26 Value and holder for value of a bill

27 Accommodation party to a bill

28 Holder in due course

29 Presumption of value and good faith

30 Negotiation of bills

31 Requisites of a valid in dorsement

32 Conditional indorsement

33 Indorsement in blank and special indorsement

34 Restrictive indorsement

35 Negotiation of overdue or dishonoured bill

36 Negotiation of bill to party already liable thereon

37 Rights of holder

38 When presentment for ac ceptance is necessary

39 Time for presenting bill payable after sight

40 Rules as to presentment for acceptance; excuses for non-presentment

41 Non-acceptance of bill

42 Dishonour by non-accep tance

43 Duties as to qualified ac ceptance

44 Rules as to presentment for payment

45 Excuse for delay or non-presentment for payment

46 Dishonour by non-pay ment

47 Notice of dishonour and effect of non-notice

48 Rules as to notice of dis honour

49 Expenses for non-notice and delay

50 Noting or protest of bill

51 Duties of holder as re gards drawee or acceptor

52 Funds in hands of drawee

53 Liability of acceptor

54 Liability of drawer or in dorser

55 Liability of stranger sign ing bill as indorser

56 Measure of damages against parties to dishon oured bill

57 Transferor by delivery and transferee

58 Discharge of bill by pay ment in due course

59 Banker paying on demand draft whereon endorse ment is forged

60 Acceptor the holder at maturity

61 Express waiver

62 Cancellation of bill

63 Alteration of bill

64 Acceptance for honour supra protest

65 Liability of acceptor for honour

66 Presentment to acceptor for honour

67 Payment for honour supra protest

68 Rights of holder to dupli cate of lost bill

69 Action on lost bill

70 Rules as to bills drawn in sets

71 Rules where laws conflict

72 Definition of cheque; ap plication of Act

73 Presentment of cheque for payment

74 Revocation of banker's authority

75 Definition of promissory note

76 Effect of delivery of promissory note

77 Joint and several promis sory notes

78 Promissory note payable

holder may treat it as an inland bill.

Effect where different parties to bill are the same person

4 (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 the 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.

(3) Where a banker carries on the business of banking at more branches than one, he shall, for the purposes of this section, be deemed to be an independent banker in respect of each of such branches, and a bill issued by one of such branches and payable at another branch shall be deemed to be a bill, and, if payable on demand, a cheque; and a bal ance at one branch may be applied in reduction of an overdrawn account at another branch without notice to the customer.

Indication of drawee

5 (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 ex change.

Indication of payee

6 (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 of two, or one of 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.

(4) Where a person is induced by fraud to sign a bill as accep tor, or a cheque as drawer, to an existing person who is never intended to receive the instrument, or any proceeds thereof, by the person fraud ulently inducing the acceptor or drawer to sign such bill or cheque, the instrument thus executed may be treated as payable to bearer.

Conditions under which bills are negotiable

7 (1) When a bill contains words prohibiting transfer, or indicat ing 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 indorsement is an indorsement 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 indorsement, is ex pressed 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.

Sums payable by a bill

8 (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) by stated instalments;

(b) with interest;

(c) by stated instalments, with a provision that upon default in payment of any instalment the whole shall become due; or

(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, then, unless the instrument otherwise provides, interest runs from the date of the bill, or if the bill is undated, from the issue thereof.

Bill payable on demand

9 (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 indorsed when it is overdue, it shall, as regards the acceptor who so accepts or any indorser who so in dorses it, be deemed to be a bill payable on demand.

Bill payable at a future time

10 (1) A bill is payable at a determinable future time within the meaning of this Act which is expressed to be payable�

(a) at a fixed period after date or sight;

(b) 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.

(2) An instrument expressed to be payable on a contingency is not a bill, and the happening of the event does not cure the defect.

Omission of date in bill payable after date

11 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 pe riod 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�

(a) where the holder in good faith and by mistake inserts a wrong date; and

(b) 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.

Ante-dating and post-dating bill etc

12 (1) Where a bill or an acceptance or any indorsement on a bill is dated, the date shall, unless the contrary is proved, be deemed to be the true date of the drawing, acceptance or indorsement, 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.

Computation of time of payment

13 Where a bill is not payable on demand the day on which it falls due is determined as follows�

(a) three days, called days of grace, are, in every case where the bill itself does not otherwise provide, added to the time of payment as fixed by the bill, and the bill is due and payable on the last day of grace;

(b) when the last day of grace falls on a public holiday, the bill is due and payable on the preceding business day:

Provided that when two or more such holidays occur on successive days the bill in respect whereof the last day of grace falls on the second or third of such successive days, shall be due and payable on the succeeding busi ness day;

(c) 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;

(d) 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.

Referee in case of need

14 (1) The drawer of a bill and any indorser 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 nonacceptance or non-payment, and any such person is called the referee in case of need.

(2) It is in the option of the holder to resort to the referee in case of need or not as he may think fit.

Optional stipulations by drawer or indorser

15 The drawer of a bill, and any indorser, may insert therein an ex press stipulation�

(a) negativing or limiting his own liability to the holder;

(b) waiving, as regards himself, some or all of the holder's
duties.

Definition and requisites of acceptance

16 (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 follow ing conditions�

(a) it must be written on the bill and be signed by the drawee, and in such case the mere signature of the drawee without additional words is sufficient; and

(b) it must not express that the drawee will perform his promise by any other means than the payment of money.

Time for acceptance

17 (1) A bill may be accepted�

(a) before it has been signed by the drawer, or while other wise incomplete;

(b) when it is overdue, or after it has been dishonoured by a previous refusal to accept, or by non-payment.

(2) When a bill payable after sight is dishonoured by nonac ceptance, and the drawee subsequently accepts it, the holder, in the ab sence of any different agreement, is entitled to have the bill accepted as of the date of first presentment to the drawee for acceptance.

General and qualified acceptances

18 (1) An acceptance is either general or qualified.

(2) A general acceptance assents without qualification to the order of the drawer.

(3) A qualified acceptance in express terms varies the effect of the bill as drawn; and in particular an acceptance is qualified�

(a) which is conditional, that is to say, which makes pay ment by the acceptor dependent on the fulfilment of a condition therein stated;

(b) which is partial, that is to say, an acceptance to pay part only of the amount for which the bill is drawn;

(d) which is qualified as to time; or

(e) which is the acceptance of some one or more of the drawees, but not of all.

(4) An acceptance to pay at a particular place is a general ac ceptance, unless it expressly states that the bill is to be paid there only and not elsewhere.

Inchoate instruments

19 (1) Where a simple signature on a blank stamped paper is de livered by the signer in order that it may be converted into a bill, it oper ates, prima facie, as an authority to fill it up as a complete bill for any amount the stamp will cover, using the signature for that of the drawer, or the acceptor, or an indorser; and, in like manner, when a bill is wanting in any material particular the person in possession of it has, prima facie, an 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; and what is reasonable time for this purpose is declared to be a question of fact:

Provided that if any such instrument after completion is negoti ated to a holder in due course it shall be valid and effectual for all pur poses 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.

Delivery of instrument

20 (1) Every contract on a bill, whether it is the drawer's, the ac ceptor's, or an indorser's, is incomplete and revocable, until the 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 person enti tled 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 indors ing, 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;

so, however, that if the bill is 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 li able to him is conclusively presumed.

(3) Where a bill is no longer in the possession of a party who has signed it as a drawer, acceptor, or indorser, a valid and uncondi tional delivery by him is presumed until the contrary is proved.

Capacity of parties

21 (1) Capacity to incur liability as a party to a bill is coextensive with capacity to contract:

Provided that nothing in this section shall enable a corporation to make itself liable as a drawer, acceptor, or indorser, of a bill unless it is competent to the corporation to do so under the law for the time being in force relating to corporations.

(2) Where a bill is drawn or indorsed by an infant, minor, or corporation having no capacity or power to incur liability on a bill, the drawing or indorsement entitles the holder to receive payment of the bill, and to enforce it against any other party thereto.

Signature essential to validity

22 No person is liable as drawer, indorser, or acceptor of a bill, who has not signed it as such:

Provided that�

(a) 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;

(b) 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 of that firm.

Forged or unauthorized signature on a bill

23 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 therefor 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.

Signature by procuration

24 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 if the agent in so signing was acting within the actual limits of his authority.

Person signing as agent or in a representative capacity

25 (1) Where a person signs a bill as drawer, indorser, 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 construc tion most favourable to the validity of the instrument shall be adopted.

Value and holder for value of a bill

26 (1) Valuable consideration for a bill may be constituted�

(a) by any consideration sufficient to support a simple con tract; or

(b) by an antecedent debt or liability; and any such debt or liability is deemed valuable consideration whether the bill is payable on demand or at a future time:

Provided that a banker shall not be deemed to be a holder for value of any cheque, bill or note received into his hands for collection, unless he has already unconditionally credited its amount to the account of the customer for whom it is collected.

(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.

Accommodation party to a bill

27 (1) An accommodation party to a bill is a person who has signed a bill as drawer, acceptor, or indorser, without receiving value therefor, 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.

Holder in due course

28 (1) A holder in due course is a holder who has taken a bill, complete and regular on the face of it, under the following conditions�

a) that he became the holder of it before it was overdue, and without notice that it had been previously dishon oured, 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 no tice of any defect in the title of the person who negoti ated 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 other unlawful means, or for an illegal consideration, or when he negotiates it in breach of faith, or under such circumstances as amount to 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.

Presumption of value and good faith

29 (1) Every party whose signature appears on a bill is, prima fa cie, 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 in an action on a bill it is admitted or proved that the acceptance, issue, or subsequent negotiation of the bill is effected with fraud, duress, 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.

Negotiation of bills

30 (1) A bill is negotiated when it is transferred from one person to another in such a manner as to constitute the transferee the holder of the bill.

(2) A bill payable to bearer is negotiated by delivery.

(3) A bill payable to order is negotiated by the indorsement of the holder completed by delivery.

(4) Where the holder of a bill payable to his order transfers it for value without indorsing it, the transfer gives the transferee such title as the transferor had in the bill, and the transferee in addition acquires the right to have the indorsement of the transferor.

(5) Where any person is under obligation to indorse a bill in a representative capacity, he may indorse the bill in such terms as to neg ative personal liability.

Requisites of a valid indorsement

31 An indorsement in order to operate as a negotiation must comply with the following conditions�

(a) it must be written on the bill itself and be signed by the indorser; and the simple signature of the indorser on the bill, without additional words, is sufficient.

An indorsement written on an allonge, or on a "copy" of a bill issued or negotiated in a country where "copies" are recognized, is deemed to be written on the bill itself;

(b) it must be an indorsement of the entire bill; and a partial indorsement, that is to say, an indorsement which pur ports to transfer to the indorsee a part only of the amount payable, or which purports to transfer the bill to two or more indorsees severally, does not operate as a negotiation of the bill;

(c) where a bill is payable to the order of two or more payees or indorsees who are not partners all must indorse, un less the one indorsing has authority to indorse for the others;

(d) where, in a bill payable to order, the payee or indorsee is wrongly designated, or his name is misspelt, he may in dorse the bill as therein described, adding, if he thinks fit, his proper signature;

(e) where there are two or more indorsements on a bill, each indorsement is deemed to have been made in the order in which it appears on the bill, until the contrary is proved;

(f) an indorsement may be made in blank or special, and may also contain terms making it restrictive.

Conditional indorsement

32 Where a bill purports to be indorsed conditionally the condition may be disregarded by the payer; and payment to the indorsee is valid whether the condition has been fulfilled or not.

Indorsement in blank and special indorsement

33 (1) An indorsement in blank specifies no indorsee, and a bill so indorsed becomes payable to bearer.

(2) A special indorsement specifies the person to whom, or to whose order, the bill is to be payable.

(3) The provisions of this Act relating to a payee apply with the necessary modifications to an indorsee under a special indorsement.

(4) When a bill has been indorsed in blank, any holder may convert the blank indorsement into a special indorsement by writing above the indorser's signature a direction to pay the bill to or to the order of himself or some other person.

Restrictive indorsement

34 (1) An indorsement is restrictive which prohibits the further negotiation of the bill or which expresses that it is a mere authority to deal with the bill as thereby directed and not a transfer of the ownership thereof, as, for example, if a bill is indorsed "Pay D. only" or "Pay D. for the account of X.," or "Pay D. or order for collection.".

(2) A restrictive indorsement gives the indorsee the right to re ceive payment of the bill and to sue any party thereto that his indorser could have sued, but gives him no power to transfer his rights as in dorsee unless it expressly authorizes him to do so.

(3) Where a restrictive indorsement authorizes further transfer, all subsequent indorsees take the bill with the same rights and subject to the same liabilities as the first indorsee under the restrictive indorse ment.

Negotiation of overdue or dishonoured bill

35 (1) Where a bill is negotiable in its origin it continues to be ne gotiable until it has been restrictively indorsed or discharged by payment or otherwise.

(2) Where an overdue bill is negotiated, it can only be negoti ated subject to any defect of title affecting it at its maturity, and thence forward no person who takes it can acquire or give a better title than that which the person from whom he took it had.

(3) A bill payable on demand is deemed to be overdue within the meaning, and for the purposes of, this section, when it appears on the face of it to have been in circulation for an unreasonable length of time; and what is an unreasonable length of time for this purpose is de clared to be a question of fact.

(4) Except where an indorsement bears date after the maturity of the bill, every negotiation is, prima facie, deemed to have been effected before the bill was overdue.

(5) Where a bill which is not overdue has been dishonoured, then any person who takes it with notice of the dishonour takes it sub ject to any defect of title attaching thereto at the time of dishonour; but nothing in this subsection shall affect the rights of a holder in due course.

Negotiation of bill to party already liable thereon

36 Where a bill is negotiated back to the drawer, or to a prior in dorser or to the acceptor, such party may, subject to this Act re-issue and further negotiate the bill; but he is not entitled to enforce payment of the bill against any intervening party to whom he was previously liable.

Rights of holder

37 The rights and powers of the holder of a bill are as follows�

(a) he may sue on the bill in his own name;

(b) where he is a holder in due course, he holds the bill free from any defect of title of prior parties, as well as from mere personal defences, available to prior parties among themselves, and may enforce payment against all parties liable on the bill;

(c) where his title is defective if he negotiates the bill to a holder in due course, that holder obtains a good and complete title to the bill, and if he obtains payment of

the bill the person who pays him in due course gets a valid discharge for the bill.

When presentment for acceptance is necessary

38 (1) Where a bill is payable after sight, presentment for accep tance is necessary in order to fix the maturity of the instrument.

(2) Where a bill expressly stipulates that it shall be presented for acceptance, or where a bill is drawn payable elsewhere than at the residence or place of business of the drawee, it must be presented for ac ceptance before it can be presented for payment.

(3) In no other case is presentment for acceptance necessary in order to render liable any party to the bill.

(4) Where the holder of a bill, drawn payable elsewhere than at the place of business or residence of the drawee, has not time, with the exercise of reasonable diligence, to present the bill for acceptance before presenting it for payment on the day that it falls due, then the delay caused by presenting the bill for acceptance before presenting it for pay ment is excused, and does not discharge the drawer and indorsers.

Time for presenting bill payable after sight

39 (1) Subject to this Act, when a bill payable after sight is negoti ated, the holder must either present it for acceptance or negotiate it within a reasonable time.

(2) If he does not present the bill for acceptance or negotiate it, the drawer and all indorsers prior to that holder are discharged.

(3) In determining what is a reasonable time within the mean ing of this section, regard shall be had to the nature of the bill, the usage of trade with respect to similar bills, and the facts of the particular case.

Rules as to presentment for acceptance; excuses for non-present ment

40 (1) A bill is duly presented for acceptance which is presented in accordance with the following rules�

(a) the presentment must be made by or on behalf of the holder to the drawee or to some person authorized to ac cept or refuse acceptance on his behalf at a reasonable hour on a business day and before the bill is overdue;

(b) where a bill is addressed to two or more drawees, who are not partners, presentment must be made to them all, unless one has authority to accept for all, then present ment may be made to him only;

(d) where the drawee is bankrupt, presentment may be made to him or to his trustee;

(e) where authorized by agreement or usage, a presentment through the post office is sufficient.

(2) Presentment in accordance with these rules is excused, and a bill may be treated as dishonoured by non-acceptance�

(a) where the drawee is dead or bankrupt, or is a fictitious person or a person not having capacity to contract by bill;

(b) where, after the exercise of reasonable diligence, such presentment cannot be effected;

(3) The fact that the holder has reason to believe that the bill, on presentment, will be dishonoured does not excuse presentment.

Non-acceptance of bill

41 When a bill is duly presented for acceptance and is not accepted within the customary time, the person presenting the bill must treat it as dishonoured by non-acceptance.

If he does not so treat it, the holder shall lose his right of recourse against the drawer and indorsers.

Dishonour by non-acceptance

42 (1) A bill is dishonoured by non-acceptance�

(a) when it is duly presented for acceptance, and such an acceptance as is prescribed by this Act is refused or cannot be obtained; or

(b) when presentment for acceptance is excused and the bill is not accepted.

(2) Subject to this Act, when a bill is dishonoured by non-ac ceptance, an immediate right of recourse against the drawer and in-
dorsers accrues to the holder, and no presentment for payment is neces sary.

Duties as to qualified acceptance

43 (1) The holder of a bill may refuse to take a qualified accep tance, and if he does not obtain an unqualified acceptance may treat the bill as dishonoured by non-acceptance.

(2) Where a qualified acceptance is taken, and the drawer or an indorser has not expressly or impliedly authorized the holder to take a qualified acceptance, or does not subsequently assent thereto, such drawer or indorser is discharged from his liability on the bill.

This subsection does not apply to a partial acceptance, whereof due no tice has been given.

(3) Where a foreign bill has been accepted as to part, it must be protested as to the balance.

(4) When the drawer or indorser of a bill receives notice of a qualified acceptance, and does not within a reasonable time express his dissent to the holder, he shall be deemed to have assented thereto.

Rules as to presentment for payment

44 (1) Subject to this Act a bill must be duly presented for pay ment; and if it is not so presented the drawer and indorsers shall be dis charged.

(2) A bill is duly presented for payment which is presented in accordance with the following rules�

(a) where the bill is not payable on demand, presentment must be made on the day it falls due;

(b) where the bill is payable on demand, then, subject to this Act, presentment must be made within a reasonable time after its issue in order to render the drawer liable, and within a reasonable time after its indorsement, in order to render the indorser liable.

In determining what is a reasonable time, regard shall be had to the nature of the bill, the usage of trade with re gard to similar bills, and the facts of the particular case;

(c) presentment must be made by the holder or by some person authorized to receive payment on his behalf at a reasonable hour on a business day, at the proper place as hereinafter defined, either to the person designated by the bill as payer, or to some person authorized to pay or refuse payment on his behalf if with the exercise of rea sonable diligence such person can there be found;

(d) a bill is presented at the proper place�

(i) where a place of payment is specified in the bill and the bill is there presented;

(ii) where no place of payment is specified, but the address of the drawee or acceptor is given in the bill, and the bill is there presented;

(iii) where no place of payment is specified and no address is given, and the bill is presented at the drawee's or acceptor's place of business, if known, and, if not, at his ordinary residence, if known;

(iv) in any other case, if presented to the drawee or acceptor wherever he can be found, or if pre sented at his last known place of business or residence;

(e) where a bill is presented at the proper place, and after the exercise of reasonable diligence no person authorized to pay or refuse payment can be found there, no further presentment to the drawee or acceptor is required;

(f) where a bill is drawn upon, or accepted by, two or more persons who are not partners, and no place of payment is specified, presentment must be made to them all;

(g) where the drawee or acceptor of a bill is dead, and no place of payment is specified, presentment must be made to a personal representative, if such there is, and with the exercise of reasonable diligence he can be found;

(h) where authorized by agreement or usage a presentment through the post office is sufficient.

Excuse for delay or non-presentment for payment

45 (1) Delay in making presentment for payment is excused when
the delay is caused by circumstances beyond the control of the holder, and not imputable to his default, misconduct or negligence; but when the cause of delay ceases to operate presentment must be made with reasonable diligence.

(2) Presentment for payment is dispensed with�

(a) where, after the exercise of reasonable diligence, pre sentment, as required by this Act, cannot be effected.

The fact that the holder has reason to believe that the bill will, on presentment, be dishonoured, does not dis pense with the necessity for presentment;

(b) where the drawee is a fictitious person;

(c) as regards the drawer, where the drawee or acceptor is not bound, as between himself and the drawer, to accept or pay the bill, and the drawer has no reason to believe that the bill would be paid if presented;

(d) as regards an indorser, where the bill was accepted or made for the accommodation of that indorser and he has no reason to expect that the bill would be paid if pre sented;

(e) by waiver of presentment, express or implied.

Dishonour by non-payment

46 (1) A bill is dishonoured by non-payment�

(a) when it is duly presented for payment and payment is refused or cannot be obtained; or

(b) when presentment is excused and the bill is overdue and unpaid.

(2) Subject to this Act, when a bill is dishonoured by non-pay ment, an immediate right of recourse against the drawer and indorsers accrues to the holder.

Notice of dishonour and effect of non-notice

47 Subject to this Act, when a bill has been dishonoured by non-ac ceptance or by non-payment, notice of dishonour must be given to the drawer and each indorser, and any drawer or indorser to whom such notice is not given is discharged:

Provided that�

(a) where a bill is dishonoured by non-acceptance, and no tice of dishonour is not given, the rights of a holder in due course subsequent to the omission shall not be prejudiced by the omission;

(b) where a bill is dishonoured by non-acceptance and due notice of dishonour is given, it shall not be necessary to give notice of a subsequent dishonour by non-payment unless the bill is, in the meantime, accepted.

Rules as to notice of dishonour

48 Notice of dishonour in order to be valid and effectual must be given in accordance with the following rules�

(a) the notice must be given by or on behalf of the holder, or by or on behalf of an indorser who, at the time of giving it, is himself liable on the bill;

(b) notice of dishonour may be given by an agent either in his own name, or in the name of any party entitled to give notice, whether that party be his principal or not;

(c) where the notice is given by or on behalf of the holder, it enures for the benefit of all subsequent holders and all prior indorsers who have a right of recourse against the party to whom it is given;

(d) where notice is given by or on behalf of an indorser enti tled to give notice as hereinbefore provided, it enures for the benefit of the holder and all indorsers subsequent to the party to whom notice is given;

(e) the notice may be given in writing or by personal com munication, and may be given in any terms which suffi ciently identify the bill, and intimate that the bill has been dishonoured by non-acceptance or non-payment;

(f) the return of a dishonoured bill to the drawer or an in dorser is, in point of form, deemed to be a sufficient no tice of dishonour;

(g) a written notice need not be signed, and an insufficient written notice may be supplemented and validated by verbal communication; and a misdescription of the bill shall not vitiate the notice unless the party to whom the notice is given is in fact misled thereby;

(h) where notice of dishonour is required to be given to any person, it may be given either to the party himself, or to his agent in that behalf;

(i) where the drawer or indorser is dead, and the party giv ing notice knows it, the notice must be given to a per sonal representative if such there be, and with the exer cise of reasonable diligence he can be found;

(j) where the drawer or indorser is bankrupt, notice may be given either to the party himself or to the trustee;

(k) where there are two or more drawers or indorsers who are not partners, notice must be given to each of them, unless one of them has authority to receive such notice for the others;

(l) the notice may be given as soon as the bill is dishon oured, and must be given within a reasonable time thereafter.

In the absence of special circumstances notice is not deemed to have been given within a reasonable time, unless�

(i) where the person giving and the person to re ceive notice reside in the same place, the notice is given or sent off in time to reach the latter on the day after the dishonour of the bill;

(ii) where the person giving and the person to re ceive notice reside in different places, the notice is sent off on the day after the dishonour of the bill, if there is a post at a convenient hour on that day, and, if there is no such post on that day, then by the next post thereafter;

(m) where a bill, when dishonoured, is in the hands of an agent, he may either himself give notice to the parties li able on the bill, or he may give notice to his principal; and if he gives notice to his principal, he must do so within the same time as if he were the holder, and the principal upon receipt of such notice has himself the same time for giving notice as if the agent had been an independent holder;

(n) where a party to a bill receives due notice of dishonour, he has after the receipt of such notice the same period of time for giving notice to antecedent parties that the holder has after the dishonour;

(o) where a notice of dishonour is duly addressed and posted, the sender is deemed to have given due notice of dishonour, notwithstanding any miscarriage by the post office.

Expenses for non-notice and delay

49 (1) Delay in giving notice of dishonour is excused where the delay is caused by circumstances beyond the control of the party giving notice, and not imputable to his default, misconduct, or negligence; but when the cause of delay ceases to operate the notice must be given with reasonable diligence.

(2) Notice of dishonour is dispensed with�

(a) when, after the exercise of reasonable diligence, notice as required by this Act cannot be given to or does not reach the drawer or indorser sought to be charged;

(b) by waiver express or implied; notice of dishonour may be waived before the time of giving notice has arrived, or after the omission to give due notice;

(i) where drawer and drawee are the same person;

(ii) where the drawee is a fictitious person or a per son not having capacity to contract;

(iii) where the drawer is the person to whom the bill is presented for payment;

(iv) where the drawee or acceptor is as between himself and the drawer under no obligation to accept or pay the bill;

(v) where the drawer has countermanded payment;

(d) as regards the indorser, in the following cases�

(i) where the drawee is a fictitious person or a per son not having capacity to contract and the in dorser was aware of the fact at the time he in-
dorsed the bill;

(ii) where the indorser is the person to whom the bill is presented for payment;

(iii) where the bill was accepted or made for his ac commodation.

Noting or protest of bill

50 (1) Where an inland bill has been dishonoured it may, if the holder thinks fit, be noted for non-acceptance or non--payment, as the case may be, but it shall not be necessary to note or protest any such bill in order to preserve the recourse against the drawer or indorser.

(2) Where a foreign bill, appearing on the face of it to be such, has been dishonoured by non-acceptance, it must be duly protested for non-acceptance, and where such a bill, which has not been previously dishonoured by non-acceptance, is dishonoured by non-payment it must be duly protested for non-payment; and if it is not so protested the drawer and indorsers are discharged.

(3) Where a bill does not appear on the face of it to be a foreign bill, protest thereof in the case of dishonour is unnecessary.

(4) A bill which has been protested for non-acceptance may be subsequently protested for nonpayment.

(5) Subject to this Act, when a bill is noted or protested, it may be noted on the day of its dishonour and must be noted not later than the next succeeding business day. When a bill has been duly noted, the protest may be subsequently extended as of the date of the noting.

(6) Where the acceptor of a bill becomes a bankrupt or insol vent or suspends payment before it matures, the holder may cause the bill to be protested for better security against the drawer and indorsers.

(7) A bill must be protested at the place where it is dishon oured:

Provided that�

(a) when a bill is presented through the post office, and re turned by post dishonoured, it may be protested at the place to which it is returned, and on the day of its return if received during business hours, and if not received during business hours, then not later than the next business day;

(b) when a bill drawn payable at the place of business or residence of some person other than the drawee, has been dishonoured by non-acceptance, it must be protested for non-payment at the place where it is ex pressed to be payable, and no further presentment for payment to, or demand on, the drawee is necessary.

(8) A protest must contain a copy of the bill, and must be signed by the notary making it, and must specify�

(a) the person at whose request the bill is protested;

(b) the place and date of protest, the cause or reason for protesting the bill, the demand made, and the answer given, if any, or the fact that the drawee or acceptor could not be found.

(9) Where a bill is lost or destroyed, or is wrongly detained from the person entitled to hold it, protest may be made on a copy or written particulars thereof.

(10) Protest is dispensed with by any circumstance which would dispense with notice of dishonour. Delay in noting or protesting is ex cused when the delay is caused by circumstances beyond the control of the holder, and not imputable to his default, misconduct, or negligence. When the cause of delay ceases to operate the bill must be noted or protested with reasonable diligence.

Duties of holder as regards drawee or acceptor

51 (1) When a bill is accepted generally presentment for payment is not necessary in order to render the acceptor liable.

(2) When by the terms of a qualified acceptance presentment for payment is required, the acceptor, in the absence of an express stip ulation to that effect, is not discharged by the omission to present the bill for payment on the day that it matures.

(3) In order to render the acceptor of a bill liable it is not neces sary to protest it, or that notice of dishonour should be given to him.

(4) Where the holder of a bill presents it for payment, he shall exhibit the bill to the person from whom he demands payment, and when a bill is paid the holder shall forthwith deliver it up to the party paying it.

Funds in hands of drawee

52 A bill, of itself, does not operate as an assignment of funds in the hands of the drawee available for the payment thereof, and the

damages may or may not be given at the same rate as interest proper.

Transferor by delivery and transferee

57 (1) Where the holder of a bill payable to bearer negotiates it by delivery without indorsing it, he is called a "transferor by delivery".

(2) A transferor by delivery is not liable on the instrument.

(3) A transferor by delivery who negotiates a bill thereby war rants to his immediate transferee being a holder for value that the bill is what it purports to be, that he has a right to transfer it, and that at the time of transfer he is not aware of any fact which renders it valueless.

Discharge of bill by payment in due course

58 (1) A bill is discharged by payment in due course by or on be half of the drawee or acceptor.

In this subsection "payment in due course" means payment made at or after the maturity of the bill to the holder thereof in good faith and with out notice that his title to the bill is defective.

(2) Subject to the provisions hereinafter contained, when a bill is paid by the drawer or an indorser it is not discharged; but

(a) where a bill payable to, or to the order of, a third party is paid by the drawer the drawer may enforce payment thereof against the acceptor, but may not re-issue the bill;

(b) where a bill is paid by an indorser, or where a bill payable to drawer's order is paid by the drawer, the party paying it is remitted to his former rights as regards the acceptor or antecedent parties, and he may, if he thinks fit, strike out his own and subsequent indorse ments, and again negotiate the bill.

(3) Where an accommodation bill is paid in due course by the party accommodated the bill is discharged.

Banker paying on demand draft whereon endorsement is forged

59 When a bill payable to order on demand is drawn on a banker, and the banker on whom it is drawn pays the bill in good faith and in the ordinary course of business, it is not incumbent on the banker to show that the indorsement of the payee or any subsequent indorsement was made by or under the authority of the person whose indorsement it pur ports to be, and the banker is deemed to have paid the bill in due course, although such indorsement has been forged or made without authority.

Acceptor the holder at maturity

60 When the acceptor of a bill is or becomes the holder of it at or after its maturity, in his own right, the bill is discharged.

Express waiver

61 (1) When the holder of a bill at or after its maturity absolutely and unconditionally renounces his rights against the acceptor the bill is discharged.

(2) The renunciation must be in writing, unless the bill is deliv ered up to the acceptor.

(3) The liabilities of any party to a bill may in like manner be renounced by the holder before, at, or after its maturity; but nothing in this section shall affect the rights of a holder in due course without no tice of the renunciation.

Cancellation of bill

62 (1) Where a bill is intentionally cancelled by the holder or his agent, and the cancellation is apparent thereon, the bill is discharged.

(2) In like manner any party liable on a bill may be discharged by the intentional cancellation of his signature by the holder or his agent. In such case any indorser who would have had a right of recourse against the party whose signature is cancelled, is also discharged.

(3) A cancellation made unintentionally, or under a mistake, or without the authority of the holder, is inoperative; but where a bill or any signature thereon appears to have been cancelled the burden of proof lies on the party who alleges that the cancellation was made uninten tionally, or under a mistake, or without authority.

Alteration of bill

63 (1) Where a bill or acceptance is materially altered without the assent of all parties liable on the bill, the bill is avoided except as against a party who has himself made, authorized, or assented to the alteration, and subsequent indorsers:

Provided that where a bill has been materially altered, but the alteration is not apparent, and the bill is in the hands of a holder in due course, such holder may avail himself of the bill as if it had not been al-

tered, and may enforce payment of it according to its original tenor.

(2) In particular the following alterations are material, that is to say, any alteration of the date, the sum payable, the time of payment, the place of payment, and, where a bill has been accepted generally, the ad dition of a place of payment without the acceptor's assent.

Acceptance for honour supra protest

64 (1) Where a bill of exchange has been protested for dishonour by non-acceptance, or protested for better security, and is not overdue, then any person, not being a party already liable thereon, may, with the consent of the holder, intervene and accept the bill supra protest, for the honour of any party liable thereon, or for the honour of the person for whose account the bill is drawn.

(2) A bill may be accepted for honour for part only of the sum for which it is drawn.

(3) An acceptance for honour supra protest must, in order to be valid�

(a) be written on the bill, and indicate that it is an accep tance for honour;

(b) be signed by the acceptor for honour.

(4) Where an acceptance for honour does not expressly state for whose honour it is made, it is deemed to be an acceptance for the honour of the drawer.

(5) Where a bill payable after sight is accepted for honour its maturity is calculated from the date of the noting, for non-acceptance, and not from the date of the acceptance for honour.

Liability of acceptor for honour

65 (1) The acceptor for honour of a bill by accepting it engages that he will, on due presentment, pay the bill according to the tenor of his acceptance, if it is not paid by the drawee, provided it has been duly presented for payment, and protested for non-payment, and that he re ceives notice of these facts.

(2) The acceptor for honour is liable to the holder and to all parties to the bill subsequent to the party for whose honour he has ac cepted.

Presentment to acceptor for honour

66 (1) Where a dishonoured bill has been accepted for honour supra protest, or contains a reference in case of need, it must be protested for non-payment before it is presented for payment to the ac ceptor for honour, or referee in case of need.

(2) Where the address of the acceptor for honour is in the same place where the bill is protested for non-payment, the bill must be pre sented to him not later than the day following its maturity; and where the address of the acceptor for honour is in some place other than that place where it was protested for non-payment, the bill must be forwarded not later than the day following its maturity for presentment to him.

(3) Delay in presentment or non-presentment is excused by any circumstance which would excuse delay in presentment for payment or non-presentment for payment.

(4) When a bill of exchange is dishonoured by the acceptor for honour it must be protested for non-payment by him.

Payment for honour supra protest

67 (1) Where a bill has been protested for non-payment, any per son may intervene and pay it supra protest for the honour of any party liable thereon, or for the honour of the person for whose account the bill is drawn.

(2) Where two or more persons offer to pay a bill for the honour of different parties, the person whose payment will discharge most par ties to the bill shall have the preference.

(3) Payment for honour supra protest, in order to operate as such and not as a mere voluntary payment, must be attested by a no tarial act of honour which may be appended to the protest or form an extension of it.

(4) The notarial act of honour must be founded on a declara tion made by the payer for honour, or his agent in that behalf, declaring his intention to pay the bill for honour, and for whose honour he pays.

(5) Where a bill has been paid for honour, all parties subse quent to the party for whose honour it is paid are discharged, but the payer for honour is subrogated for, and succeeds to both the rights and duties of, the holder as regards the party for whose honour he pays, and all parties liable to that party.

(6) The payer for honour on paying to the holder the amount of the bill and the notarial expenses incidental to its dishonour is entitled to receive both the bill itself and the protest. If the holder do not on de mand deliver them up he shall be liable to the payer for honour in dam ages.

Bermuda Consolidated Legislation

Bills of Exchange Act 1934