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This Act may be cited as the Bills of Exchange Act 1882.
In this Act, unless the context otherwise requires,—
“Acceptance” means an acceptance completed by delivery or notification.
“Action” includes 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 indorsee of a bill or note who is in possession of it, or the bearer thereof.
“Indorsement” means an indorsement completed by delivery.
“Issue” means the first delivery of a bill or note, complete in form to a person who takes it as a holder.
“Person” includes a body of persons whether incorporated or not.
[F1“postal operator” has the meaning given by section 125(1) of the Postal Services Act 2000.]
“Value” means valuable consideration.
“Written” includes printed, and “writing” includes print.
F1S. 2: Definition of “postal operator” inserted (26.3.2001) by S.I. 2001/1149, art. 3(1), Sch. 1 para. 4(2)
C1S. 2 extended by City of London (Various Powers) Act 1937 (c. xlv), s. 28(1), Sch. 2, Local Government (Scotland) Act 1947 (c. 43, SIF:81:2), s. 290(3), S.I. 1957/2228 (1957 I, p. 801) and 1974/519
(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 or at a 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 a bill of exchange.
(3)An order to pay out 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 re-imburse 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 therefor;
(c)That it does not specify the place where it is drawn or the place where it is payable.
C1S. 3 amended by Decimal Currency Act 1969 (c. 19), s. 2
(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 Islands” mean 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 part of the dominions of Her Majesty.
(2)Unless the contrary appear on the face of the bill the holder may treat it as an inland bill.
(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.
(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.
(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 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.
(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 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 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.
(1)The sum payable by a bill is a sum certain within the meaning of this Act, although it was 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.
(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 indorses it, be deemed a bill payable on demand.
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.
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.
(1)Where a bill or an acceptance or any indorsement 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 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
Where a bill is not payable on demand the day on which it falls due is determined as follows: F1
[(1)The bill is due and payable in all cases on the last day of the time of payment as fixed bythe 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 a calendar month.
F1S. 14(1) substituted except in relation to bills drawn and notes made before 16.1.1972 by Banking and Financial Dealings Act 1971 (c. 80), s. 3(2)(3)
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 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.
The drawer of a bill, and any indorser, 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.
(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.
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.
(1)An acceptance is either (a) general or (b) qualified.
(2)A general acceptance assents without qualification to the order of the drawer. A qualified acceptance in expressed 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.
(1)Where a simple signature on a blank . . . F1 paper is delivered by the signer 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 . . . F1, 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 a prima facie 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.
F1Words repealed by Finance Act 1970 (c. 24), Sch. 8 Pt. V and Finance Act (Northern Ireland) 1970 (c. 21), Sch. 3 Pt. III.
(1)Every contract on a bill, whether it be the drawer’s, the acceptor’s, or an indorser’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 person 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 indorser, a valid and unconditional delivery by him is presumed until the contrary is proved.
(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 drawer, acceptor, or indorser 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 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.
No person is liable as drawer, indorser, 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.
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 unauthorised 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 unauthorised signature not amounting to a forgery.
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.
(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 construction most favourable to the validity of the instrument shall be adopted.
(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.
(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.
(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; 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 an illegal consideration, or when he negotiates it in breach of faith, or under such circumstances as 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.
C1S. 29 excluded by Consumer Credit Act 1974 (c. 39, SIF 60), s. 125(1)
C2S. 29(2) amended by Consumer Credit Act 1974 (c. 39, SIF 60), s. 125(2)
(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 in 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.
(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 negative personal liability.
An indorsement in order to operate as a negotiation must comply with the following conditions, namely,—
(1)It must be written on the bill itself and be signed by the indorser. 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 recognised, is deemed to be written on the bill itself.
(2)It must be an indorsement of the entire bill. A partial indorsement, that is to say, an indorsement which purports 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.
(3)Where a bill is payable to the order of two or more payees or indorsees who are not partners all must indorse, unless the one indorsing has authority to indorse for the others.
(4)Where, in a bill payable to order, the payee or indorsee is wrongly designated, or his name is mis-spelt, he may indorse the bill as therein described, adding, if he thinks fit, his proper signature.
(5)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.
(6)An indorsement may be made in blank or special. It may also contain terms making it restrictive.
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.
(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.
(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 be 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 receive 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 indorsee unless it expressly authorise him to do so.
(3)Where a restrictive indorsement authorises 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 indorsement.
(1)Where a bill is negotiable in its origin it continues to be negotiable until it has been (a) restrictively indorsed or (b) discharged by payment or otherwise.
(2)Where an overdue bill is negotiated, it can only be negotiated subject to any defect of title affecting it at its maturity, and thenceforward 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. What is an unreasonable length of time for this purpose is 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 any person who takes it with notice of the dishonour takes it subject to any defect of title attaching thereto at the time of dishonour, but nothing in this sub-section shall affect the rights of a holder in due course.
Where a bill is negotiated back to the drawer, or to a prior indorser or to the acceptor, such party may, subject to the provisions of 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.
The rights and powers of the holder of a bill are as follows:
(1)He may sue on the bill in his own name:
(2)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:
(3)Where his title is defective (a) if he negotiates the bill to a holder in due course, that holder obtains a good and complete title to the bill, and (b) if he obtains payment of the bill the person who pays him in due course gets a valid discharge for the bill.
(1)Where a bill is payable after sight, presentment for acceptance 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 acceptance 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, the delay caused by presenting the bill for acceptance before presenting it for payment is excused, and does not discharge the drawer and indorsers.
(1)Subject to the provisions of this Act, when a bill payable after sight is negotiated, the holder must either present it for acceptance or negotiate it within a reasonable time.
(2)If he do not do so, the drawer and all indorsers prior to that holder are discharged.
(3)In determining what is a reasonable time within the meaning 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.
(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 authorised to accept 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 presentment may be made to him only:
(c)Where the drawee is dead presentment may be made to his personal representative:
(d)Where the drawee is bankrupt, presentment may be made to him or to his trustee:
(e)Where authorised by agreement or usage, a presentment through [F1a postal operator] 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:
(c)Where, although the presentment has been irregular, acceptance has been refused on some other ground.
(3)The fact that the holder has reason to believe that the bill, on presentment, will be dishonoured does not excuse presentment.
F1Words in s. 41(1)(e) substituted (26.3.2001) by S.I. 2001/1149, art. 3(1), Sch. 1 para. 4(3)
Bills of Exchange Act 1882