Acts of Bill of Exchange

1、1) Issue（出票）（出票） To issue a draft = To draw a B/E Act of issue comprises two acts to be performed by the drawer. One act is to draw and sign a draft, the other is to deliver it to the payee.Acts of Bill of ExchangeDrawerPayee 2) Endorsement （背书）（背书） Endorsement is the signature of the endorser made

2、on the back of bill of exchange. The aim of the endorsement is to transfer the draft from one person to another. Endorsement comprises two acts. One is to sign on the back of the draft, the other is to deliver it to the endorsee. Must be made for the whole amount of the draft, and an endorsement for

3、 a partial amount will be considered as invalid endorsement.Acts of Bill of Exchange Four types of endorsement Blank endorsement: an endorsement in blank is one that shows an endorsers signature only and specifies no endorsee. It is also called a general endorsement. A draft so endorsed becomes paya

4、ble to bearer. For exampleActs of Bill of ExchangeFor A Co., London (the endorser) Signature (of the endorser) Four types of endorsement Special endorsement: A special endorsement is one that specifies an endorsee to whom or to whose order the draft is to be paid, in addition to the signature of an

5、endorser. For exampleActs of Bill of ExchangePay to the order of B Co., London (the endorsee) For A Co., London (the endorser) Signature (of the endorser) Restrictive endorsement: An endorsement is restrictive when it prohibits further transfer of the draft.Acts of Bill of ExchangePay to ABC Bank on

6、ly (the endorsee)For A Co., London (the endorser)Signature (of the endorser ) Pay to ABC Bank not negotiable (the endorsee) For A Co., London (the endorser) Signature (of the endorser) )Pay to ABC Bank not transferable (the endorsee) For A Co,. London (the endorser) Signature (of the endorser) )Pay

7、to ABC Bank not to order (the endorsee) For A Co., London (the endorser) Signature (of the endorser) Four types of endorsement Conditional endorsement: A conditional endorsement transfers ownership subject to a specified term and condition. For exampleActs of Bill of ExchangePay to the order of B Co

8、. on delivery of B/L to Hong Kong Bank.For A Co., LondonSignature 3) Presentation （提示）（提示） Presentment/Presentation is to be made by the holder to the person designated as drawee for payment if it is a sight bill and for acceptance and payment if it is a time bill. Acts of Bill of ExchangePresentati

9、on for paymentPresentation for acceptancesight billtime bill As a general rule, a bill of exchange must be duly presented for payment, and if it is not so presented, the drawer and endorsers are discharged. This is a vitally important rule. duly 按时按时discharge 解除债务解除债务Acts of Bill of Exchange There a

10、re many cases where the holder of a bill has lost his rights completely as against the drawer and endorsers, merely because he failed to observe the very strict rules relating to presentment for payment. case 案例案例Acts of Bill of Exchange 4) Acceptance （承兑）（承兑）Acceptance of a draft is a signification

11、 by the drawee of his assent to the order given by the drawer.Acts of Bill of ExchangeThe drawee signs his name across the face of the bill that he will pay when it falls due.Promise to payAcceptanceDelivering the billWriting word “accepted”Date of acceptingsignaturedraweeholderThe purpose of accept

12、ance:1. Establish the liability of the parties 确定各方的债务责任确定各方的债务责任2. Present the bill for payment 便于提示付款便于提示付款3. If necessary, give notice of dishonor 如果必要，作成拒付通知如果必要，作成拒付通知Characteristics of Acceptance1. The acceptor is the drawee.2. The word “ACCEPTED”, the date of acceptance, and the place of paym

13、ent and the acceptors signature are written on the face of the draft.3. An acceptance is a promise of payment.Acts of Bill of ExchangePresentation for acceptance is legally necessary in three cases: (1) where a bill is payable after sight, presentation for acceptance is necessary in order to fix the

14、 maturity of the instrument;(2) where a bill expressly stipulates that it must be presented for acceptance, and (3) where a bill is drawn payable elsewhere than at the residence or place of business of the drawee.Acceptance of Bills Except in the three cases listed above, it is not obligatory to pre

15、sent a bill for acceptance. The holder may await the maturity of the bill and then present it for payment. Acts of Bill of Exchange 5) Payment（付款）（付款） Act of payment is performed when a bill of exchange is paid. A bill is discharged by payment in due course only when such payment is made by or on be

16、half of the drawee or the acceptor.discharged =解除付款业务解除付款业务payment in due course=正当正当付款付款on behalf of=代表某人利益代表某人利益(A) Payment should be made by or on behalf of the drawee or the acceptor and not by the drawer or any endorser. The payment made by the drawer or any endorser is not a final payment beca

17、use he may claim payment from the drawee or the acceptor.(B) Payment should be made on or after the maturity date of the bill and can not be made in advance.(C) Payment should be made to the holder and if the bill has been transferred, the bank will check the endorsements or at least the sequence of

18、 the endorsements before making payment.(D) Payment should be made in good faith, without knowing that the holders title thereto is defective.Acts of Bill of ExchangeIn short, payment in due course means payment made or after the maturity of the bill to the holder thereof in good faith and without n

19、otice that his title to the bill is defective. When the payment is made in due course, it is the final payment and the bill is discharged.That is to say that the drawees or the acceptors liability to the bill ends and so does the liabilities of other debtors to the bill such as the drawer and the en

20、dorsers, if any. 6) Dishonor（拒付或退票）（拒付或退票）Act of dishonor is a failure or refusal of acceptance on or payment of a bill of exchange when presented. When a bill duly presented for acceptance is not accepted within a customary time, the presenting person must treat it as dishonored by non-acceptance,

21、while presented for payment, the holder must treat it as dishonored by non-payment.Acts of Bill of Exchange 7) Notice of Dishonor (拒付通知拒付通知) A notice on which default of acceptance or of payment by the drawee or the acceptor is advised, to be given by holder of a draft to the drawer and all the endo

22、rsers whom he seeks to hold liable for payment. The purpose of giving such notice is to inform the drawer and prior endorsers the default of acceptance or payment so that they may get ready to honor the payment. A notice of dishonor must be given by or on behalf of the holder or an endorsee on the n

23、ext business day after the dishonor of the draft.Acts of Bill of Exchange There are two methods in which the notice of dishonor may reach the prior parties and drawer. Acts of Bill of Exchange 8) Recourse（追索（追索)Acts of Bill of ExchangeActs of Bill of Exchange 9) Protest(拒绝证书拒绝证书) Protest is a formal

24、 certificate given by a notary party (公正人）公正人） or other authorized person to evidence that a bill of exchange has been dishonored. The protest should be done on the very day or no later than the next business day from the day of dishonor. After a bill is dishonored and a notice of dishonor is given,

25、 the holder may hand the bill again to a notary party who will present it again to the drawee so as to obtain a legal proof of the act of dishonor. If it is dishonored again, the notary party then will draw a protest and return it to the holder together with the bill, against which the holder may ex

26、ercise his right of recourse against the prior parties. The protest fee is to be borne by the drawer and will be charged to him at the time when the compensation is made.Acts of Bill of Exchange 10) Acceptance for honor supra protest (参加承兑参加承兑) Acceptance for honor supra protest is an act performed

27、by the acceptor for honor, who accepts the bill supra protest, for the honor of any party liable thereon or for the honor of the person for whose account the bill is drawn. A bill may be accepted for honor only a part of the sum drawn payable. 11) Payment for honor supra protest (参加付款参加付款) Is an act

28、 similar to acceptance for honor supra protest in the sense that it vindicates (维护维护) the honor of a party liable on a bill of exchange. 12) Guarantee(保证保证) Act of guarantee is performed by a third party called guarantor, who engages that the bill will be paid on presentation if it is a sight bill o

29、r accepted on presentation and paid at maturity if it is a time bill. Acts of Bill of Exchange A holder is the party who is in possession of the instrument, and only the legal possessor can become the holder. A holder can be payee, bearer or endorsee. A holder is creditor（债权人）（债权人） to the bill. Paye

30、e will always be the original holder. A person holding a forged bill or one who has stolen a bill payable to the order of another is not a holder, but a wrongful possessor. A legal possessor or holder can have the following rights: To duly present the instrument for acceptance or payments To transfer a bill to other persons To endorse a bill To give notice of dishonor to the prior party To exercise right of recourse against the prior party To sue in his own name To duplicate the lost billHolder Value r