Beruflich Dokumente
Kultur Dokumente
BILLS OF EXCHANGE
WEEK 1
5/22/12
LECTURE 1
Outline
Introduction to Bills of Exchange Uses of Bills of Exchange Advantages & Disadvantages of
Bills of Exchange
Elements of Bill of Exchange Parties to Bills of Exchange Dealings 5/22/12
with
Bill
of
defines bill of exchange as. 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 or at a fixed or determinable future time a sum certain in money to or
5/22/12
Bill of ExchangeContd
The essential characteristic of the Bill of
sell it, at a discount to a bank to raise some cash immediately, albeit at less than the full face value of the bill.
There is a discount on the bill since it will
Bill of ExchangeContd
The seller will take this into account
when fixing the price for the goods. Alternatively he may require the buyer to open a Documentary Credit with a bank under which the bank undertakes to accept a Bill of Exchange drawn on it by the seller; the banks acceptance will increase the discount value of the bill.
5/22/12 person in lawful possession of the The
are treated commercially on maturity as cash, being generally unaffected by counterclaims. (Exception to this rule is Fraud)
5/22/12
international trade, offers both advantages to the seller and B. period between the purchase of the goods and maturity of the bill. maturity date by selling the bill.
5/22/12 However:
relatively little security since the bill may not be honored by the buyer even after acceptance.
If
this is the case, the seller having transferred it to the bank will be liable on it and may be sued by the bank.
5/22/12
Inland Bills
Bill of Exchange Act (1909) S 9(1)
defines Inland Bill as a a bill is, or on the face of purports to be, both drawn and payable in Australasia, or which is, or appears to be drawn within Australasia upon 5/22/12
Inland Bills..(Contd)
Australasia is defined in s(4) as Australia and any Australian Territory, New Zealand and the Fiji Islands.
person resident in Nadi; is an inland bill even though it maybe payable in New York, since it is both drawn upon a person resident in Australasia (Nadi, Fiji).
5/22/12
Foreign Bills
A bill that is drawn on one country but payable in another. The financial instrument must be addressed by one person to another, requiring him to pay the bearer or holder a sum certain in money.
Foreign Bills(Contd)
Example:
In other words, the drawer and the acceptor lives in different countries; 5/22/12 than such a Bill of Exchange will be
Foreign Bills(Contd)
In Foreign Bill of Exchange, three copies of bill are made and each copy bears a reference of the other two copies. All the three copies are dispatched to the Acceptor by a different mode.
Foreign Bills(Contd)
However, on the payment of the first copy of the Bill of Exchange, the other two copies become redundant.
relation to Foreign Bill of Exchange, a Foreign Bill is stamped twice, once in the country of the drawer and once in the foreign country. 5/22/12
Inland Bill
Foreign Bill
The drawer &theIncase of Foreign acceptor of an InlandBOE, one of the BOE are of the same parties is a country
Language
Foreigner Inland Bill is drawn A Foreign Bill is in the language always drawn in prevalent in the English country in which it is drawn An Inland Bill is A Foreign Bill is
5/22/12
Accommodation Bills
5/22/12
5/22/12
Inchoate Bills
5/22/12
made provided that something is done, for example the payee has signed the receipt attached to the bill would render the bill invalid.
5/22/12
The question of what constitutes an unconditional order was judicially discussed in Rosenhain v Commonwealth Bank of Australia (1922) 30 CLR 46 by Knoxx CJ, Gavan Duffy and Starke JJ. The instrument in question had the words Documents against Acceptance typed at the top of the document. of those words.
The court refused to determine the legal effects It was said, what ever their effect, once the
5/22/12 drawee has accepted the bill, his promise is
decision leaves the question open but indicates that it will be determined in the context of the particular promise by the acceptor, and that the pre-condition that is fulfilled before the acceptance will not of itself render the bill conditional.
an instrument outside the definition of the Bill of Exchange is an order for payment which is conditional upon the payee signing a form of receipt either annexed to the instrument or 5/22/12 which forms part of the instrument itself.
5/22/12
as a drawer, indorser or acceptor of a bill if he has not signed it as such. or an assumed name, he is liable on the bill as if he had signed it in his own name.
equivalent to the signature, by the person so signing, of the names of all persons liable as 5/22/12
It Must be Signed By the Person Giving It (Contd) The signature must be that of the drawer or his
agent.
A signature in the name of the trade name is
Is an instrument bearing a rubber stamp or other facsimile of a drawers signature or a name printed by telex machine in fact signed by the person making the instrument?
5/22/12
Case: Torrac Invesments Pty v Australian National Airlines Commission (1985) ANZ Conv R 82, Derrington J Held a document bearing a teletyped signature to be signed for the purposes of the requirement for writing of a 5/22/12
person, the holder(the owner) can choose to treat the instrument as a bill of exchange or a promissory note.
S11(1)
states that the drawee must be named, or otherwise indicated, with reasonable certainty.
5/22/12
A sum of money is still certain within the meaning of the Act although it is paid:
(c) according to an indicated exchange rate to be determined as directed by the bill. Case: Rosenhain v Commonwealth Bank of Australia (1922) 30 CLR 46
5/22/12
payable to a particular person or to somebody indicated by him, that is Pay X or pay X or order.
5/22/12
It Must Payable on Demand or At a Fixed or Determinable Future Time payable on demand where it A bill is expressed to be payable or where it
expressed to presentation. be payable at sigh or
is is on
If a bill is not payable on demand or at a fixed future time (Example: 90 day Commercial Bills): It must be payable at a determinable future time, which includes a bill expressed to be payable at a fixed period after date or sight.
5/22/12
Drawer
Payee Drawee
5/22/12
immediately after signature by the drawer, the drawer is the only person liable on the bill to third parties and to the payee for the amount ordered to be paid. 5/22/12
5/22/12
Payee
5/22/12
5/22/12
END OF LECTURE
THANKS FOR YOUR Click to edit Master subtitle style ATTENTION!!!
A. Sharma
5/22/12