The Bills of Exchange Act 1883

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AT 1 of 1883

THE BILLS OF EXCHANGE ACT 1883

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THE BILLS OF EXCHANGE ACT 1883

Index Section Page

PART I – PRELIMINARY 7

1 Short title .......................................................................................................................... 7
2 Interpretation ................................................................................................................... 7
PART II – BILLS OF EXCHANGE 8

Form and Interpretation 8

3 Bill of exchange defined ................................................................................................. 8
4 Inland and foreign bills .................................................................................................. 8
5 Effect where different parties to bill are the same person ........................................ 9
6 Address to drawee .......................................................................................................... 9
7 Certainty required as to payee ...................................................................................... 9
8 What bills are negotiable ............................................................................................... 9
9 Sum payable .................................................................................................................. 10
10 Bill payable on demand ............................................................................................... 10
11 Bill payable at a future time ........................................................................................ 10
12 Omission of date in bill payable after date ............................................................... 11
13 Ante-dating and post-dating ....................................................................................... 11
14 Computation of time of payment ............................................................................... 11
15 Case of need ................................................................................................................... 11
16 Optional stipulations by drawee or indorser ............................................................ 12
17 Definition and requisites of acceptance ..................................................................... 12
18 Time for acceptance ...................................................................................................... 12
19 General and qualified acceptances ............................................................................. 12
20 Inchoate instruments .................................................................................................... 13
21 Delivery .......................................................................................................................... 13
Capacity and Authority of Parties 14

22 Capacity of parties ........................................................................................................ 14
23 Signature essential to liability ..................................................................................... 14
24 Forged or unauthorised signature .............................................................................. 14
25 Procuration signatures ................................................................................................. 15
26 Persons signing as agent or in representative capacity ........................................... 15
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The Consideration for a Bill 15

27 Value and holder for value ......................................................................................... 15
28 Accommodation bill or party ..................................................................................... 15
29 Holder in due course ................................................................................................... 16
30 Presumption of value and good faith ........................................................................ 16
Negotiation of Bills 16

31 Negotiation of bill ........................................................................................................ 16
32 Requisites of a valid indorsement .............................................................................. 17
33 Conditional indorsement ............................................................................................ 17
34 Indorsement in blank and special indorsement ....................................................... 17
35 Restrictive indorsement ............................................................................................... 18
36 Negotiation of overdue or dishonoured bill ............................................................ 18
37 Negotiation of bill to party already liable thereon .................................................. 18
38 Rights of the holder ...................................................................................................... 19
General Duties of the Holder 19

39 When presentment or acceptance is necessary ........................................................ 19
40 Time for presenting bill payable after sight ............................................................. 19
41 Rules as to presentment for acceptance, and excuses for non-presentment ........ 20
42 Non-acceptance ............................................................................................................ 20
43 Dishonour by non-acceptance and its consequences .............................................. 20
44 Duties as to qualified acceptances ............................................................................. 21
45 Rules as to presentment for payment ........................................................................ 21
46 Excuses for delay or non-presentment for payment ............................................... 22
47 Dishonour by non-payment ........................................................................................ 23
48 Notice of dishonour and effect of non-notice ........................................................... 23
49 Rules as to notice of dishonour .................................................................................. 23
50 Excuses for non-notice and delay .............................................................................. 25
51 Noting or protest of bill ............................................................................................... 25
52 Duties of holder as regards drawee or acceptor ...................................................... 27
Liabilities of Parties 27

53 Funds in hands of drawee ........................................................................................... 27
54 Liability of acceptor...................................................................................................... 27
55 Liability of drawer or indorser ................................................................................... 28
56 Stranger signing bill liable as indorser ...................................................................... 28
57 Measure of damages against parties to dishonoured bill ....................................... 28
58 Transferor by delivery and transferee ....................................................................... 29
Discharge of Bill 29

59 Payment in due course ................................................................................................ 29
60 Banker paying demand draft whereon indorsement forged ................................. 30
61 Acceptor the holder at maturity ................................................................................. 30
62 Express waiver .............................................................................................................. 30
63 Cancellation ................................................................................................................... 30
64 Alteration of bill............................................................................................................ 30
Acceptance and Payment for Honour 31

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65 Acceptance for honour supra protest ........................................................................ 31
66 Liability of acceptor for honour .................................................................................. 31
67 Presentment to acceptor for honour ........................................................................... 32
68 Payment for honour supra protest ............................................................................. 32
Lost Instruments 33

69 Holder’s right to duplicate of lost bill ........................................................................ 33
70 Action on lost bill .......................................................................................................... 33
Bill in a Set 33

71 Rules as to sets ............................................................................................................... 33
Conflict of Laws 34

72 Rules where laws conflict ............................................................................................ 34
PART III – CHEQUES ON A BANKER 35

73 Cheque defined ............................................................................................................. 35
73A Cheques in the Manx language .................................................................................. 35
74 Presentment of cheque for payment .......................................................................... 35
74A Presentment of cheque for payment: alternative place of presentment ............... 35
74B Presentment of cheque for payment: alternative means of presentment by
banker ............................................................................................................................. 36
75 Revocation of banker’s authority ............................................................................... 36
Crossed Cheques 37

76 General and special crossings defined ....................................................................... 37
77 Crossing by drawer or after issue............................................................................... 37
78 Crossing a material part of cheque ............................................................................. 37
79 Duties of banker as to crossed cheques ..................................................................... 37
80 Protection to banker and drawer where cheque crossed ........................................ 38
81 Effect of crossing on holder ......................................................................................... 38
81A Non-transferable cheques ............................................................................................ 38
82 [Repealed] ...................................................................................................................... 39
PART IV – PROMISSORY NOTES 39

83 Promissory note defined .............................................................................................. 39
84 Delivery necessary ........................................................................................................ 39
85 Joint and several notes ................................................................................................. 39
86 Note payable on demand ............................................................................................ 39
87 Presentment of note for payment ............................................................................... 40
88 Liability of maker .......................................................................................................... 40
89 Application of Part II to notes ..................................................................................... 40
PART V – SUPPLEMENTARY 41

90 Good faith ...................................................................................................................... 41
91 Signature ........................................................................................................................ 41
92 Computation of time .................................................................................................... 41
93 When noting equivalent to protest ............................................................................. 41
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94 Protest when notary not accessible ............................................................................ 41
95 Dividend warrants may be crossed ........................................................................... 42
96 [Repealed] ...................................................................................................................... 42
97 Savings ........................................................................................................................... 42
98 Construction with other Acts, etc .............................................................................. 42
SCHEDULE 1 43

SECTION 94 43
SCHEDULE 2 43

ENDNOTES 45

TABLE OF LEGISLATION HISTORY 45
TABLE OF RENUMBERED PROVISIONS 45
TABLE OF ENDNOTE REFERENCES 45

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c i e
THE BILLS OF EXCHANGE ACT 1883

Received Royal Assent: 19 July 1883
Promulgated: 5 July 1884
Commenced: 5 July 1884
AN ACT
to Codify the Law relating to Bills of Exchange, Cheques, and
Promissory Notes.
PART I – PRELIMINARY

1 Short title

This Act may be cited as ‘The Bills of Exchange Act, 1883’.
2 Interpretation

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:
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“Issue
” means the first delivery of a bill or note, complete in form to a person
who takes it as a holder:
“Value
” means valuable consideration:
“Written
” includes printed, and “writing
” includes print.
PART II – BILLS OF EXCHANGE

Form and Interpretation
3 Bill of exchange defined

(1) A bill of exchange is an unconditional order in writing, addressed by one
person to another, signed by the person giving it, requiring the person to
whom it is addressed to pay on demand 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 of a particular fund is not unconditional within the
meaning of this section; but an unqualified order to pay, coupled with (a)
an indication of a particular fund out of which the drawee is to 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.
4 Inland and foreign bills

(1) An inland bill is a bill which is or on the face of it purports to be —
(a) both drawn and payable within the British Islands, or
(b) drawn within the British Islands upon some person resident
therein.
Any other bill is a foreign bill.
For the purposes of this Act “British Islands
” means any part of the
United Kingdom of Great Britain and Ireland, the islands of Man,
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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.
5 Effect where different parties to bill are the same person

(1) A bill may be drawn payable to, or to the order of, the drawer; or it may
be drawn payable to, or to the order of, the drawee.
(2) Where in a bill drawer and drawee are the same person, or where the
drawee is a fictitious person or a person not having capacity to contract,
the holder may treat the instrument, at his option, either as a bill of
exchange or as a promissory note.
6 Address to drawee

(1) The drawee must be named or otherwise indicated in a bill with
reasonable certainty.
(2) A bill may be addressed to two or more drawees whether they are
partners or not, but an order addressed to two drawees in the alternative
or to two or more drawees in succession is not a bill of exchange.
7 Certainty required as to payee

(1) Where a bill is not payable to bearer, the payee must be named or
otherwise indicated therein with reasonable certainty.
(2) A bill may be made payable to two or more payees jointly, or it may be
made payable in the alternative to one 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.
8 What bills are negotiable

(1) When a bill contains words prohibiting transfer, or indicating an
intention that it should not be transferable, it is valid as between the
parties thereto, but is not negotiable.
(2) A negotiable bill may be payable either to order or to bearer.
(3) A bill is payable to bearer which is expressed to be so payable, or on
which the only or last 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
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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.
9 Sum payable

(1) The sum payable by a bill is a sum certain within the meaning of this Act,
although it is required to be paid —
(a) With interest.
(b) By stated instalments.
(c) By stated instalments, with a provision that upon default in
payment of any instalment the whole shall become due.
(d) According to an indicated rate of exchange or according to a rate
of exchange to be ascertained as directed by the bill.
(2) Where the sum payable is expressed in words and also in figures, and
there is a discrepancy between the two, the sum denoted by the words is
the amount payable.
(3) Where a bill is expressed to be payable with interest, unless the
instrument otherwise provides, interest runs from the date of the bill,
and if the bill is undated from the issue thereof.
10 Bill payable on demand

(1) A bill is payable on demand —
(a) Which is expressed to be payable on demand or at sight, or on
presentation; or
(b) In which no time for payment is expressed.
(2) Where a bill is accepted or 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.
11 Bill payable at a future time

A bill is payable at a determinable future time within the meaning of this Act
which is expressed to be payable —
(1) At a fixed period after date or sight.
(2) On or at a fixed period after the occurrence of a specified event which is
certain to happen, though the time of happening may be uncertain.
An instrument expressed to be payable on a contingency is not a bill, and the
happening of the event does not cure the defect.
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12 Omission of date in bill payable after date

Where a bill expressed to be payable at a fixed period after date is issued
undated, or where the acceptance of a bill payable at a fixed period after sight is
undated, any holder may insert therein the true date of issue or acceptance, and
the bill shall be payable accordingly.
Provided that (1) where the holder, in good faith and by mistake, inserts a
wrong date the bill shall not be avoided thereby, 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 also as to such last
mentioned holder operate and be payable as if the date so inserted had been the
true date.
13 Ante-dating and post-dating

(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.
14 Computation of time of payment

Where a bill is not payable on demand the day on which it falls due is
determined as follows: —
(1) The bill is due and payable in all cases on the last day of the time of
payment as fixed by the bill or, if that is a non-business day, on the
succeeding business day.1

(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 including
the day of payment.
(3) Where a bill is payable at a fixed period after sight, the time begins to run
from the date of the acceptance if the bill be accepted, and from the date
of noting or protest if the bill be noted or protested for non-acceptance,
or for non-delivery.
(4) The term ‘month’ in a bill means calendar month.
15 Case of need

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.
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16 Optional stipulations by drawee or indorser

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.
17 Definition and requisites of acceptance

(1) The acceptance of a bill is the signification by the drawee of his assent to
the order of the drawer.
(2) An acceptance is invalid unless it complies with the following conditions,
namely:
(a) It must be written on the bill and be signed by the drawee. The
mere signature of the drawee without additional words is
sufficient:
(b) It must not express that the drawee will perform his promise by
any other means than the payment of money.
18 Time for acceptance

A bill may be accepted,
(1) Before it has been signed by the drawer, or while otherwise incomplete:
(2) When it is overdue, or after it has been dishonoured by a previous
refusal to accept, or by non-payment:
(3) When a bill payable after sight is dishonoured by non-acceptance, and
the drawee subsequently accepts it, the holder, in the absence of any
different agreement, is entitled to have the bill accepted as of the date of
first presentment to the drawee for acceptance.
19 General and qualified acceptances

(1) An acceptance is either (a) general or (b) qualified.
(2) A general acceptance assents without qualification to the order of the
drawer. A qualified acceptance in express terms varies the effect of the
bill as drawn.
In particular an acceptance is qualified which is —
(a) conditional, that is to say, which makes payment by the acceptor
dependent on the fulfilment of a condition therein stated:
(b) partial, that is to say, an acceptance to pay part only of the amount
for which the bill is drawn:
(c) local, that is to say, an acceptance to pay only at a particular
specified place:
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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.
20 Inchoate instruments

(1) Where a simple signature on a blank 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, 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.
21 Delivery

(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.
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(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.
Capacity and Authority of Parties
22 Capacity of parties

(1) Capacity to incur liability as a party to a bill is co-extensive with capacity
to contract.
Provided that nothing in this section shall enable a corporation to make
itself liable as drawer, acceptor, or 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 of the bill to receive payment thereof
from and to enforce it against any other party thereto.
23 Signature essential to liability

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.
24 Forged or unauthorised signature

Subject to the provisions of this Act, where a signature on a bill is forged or
placed thereon without the authority of the person whose signature it purports
to be, the forged or 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.
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25 Procuration signatures

A signature by procuration operates as notice that the agent has but a limited
authority to sign, and the principal is only bound by such signature if the agent
in so signing was acting within the actual limits of his authority.
26 Persons signing as agent or in representative capacity

(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.
The Consideration for a Bill
27 Value and holder for value

(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.
28 Accommodation bill or party

(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.
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29 Holder in due course

(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
for 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.
30 Presumption of value and good faith

(1) Every party whose signature appears on a bill is prima facie deemed to
have become a party thereto for value.
(2) Every holder of a bill is prima facie deemed to be a holder in due course;
but if 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.
Negotiation of Bills
31 Negotiation of 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 the 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.
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(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.
32 Requisites of a valid indorsement

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 endorsement 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 think 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 endorsement may be made in blank or special. It may also contain
terms making it restrictive.
33 Conditional indorsement

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.
34 Indorsement in blank and special indorsement

(1) An indorsement in blank specifies no indorsee, and a bill so indorsed
become 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.
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(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.
35 Restrictive indorsement

(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.
36 Negotiation of overdue or dishonoured bill

(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 subsection
shall affect the rights of a holder in due course.
37 Negotiation of bill to party already liable thereon

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
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c AT 1 of 1883 Page 19

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.
38 Rights of the holder

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.
General Duties of the Holder
39 When presentment or acceptance is necessary

(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.
40 Time for presenting bill payable after sight

(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.
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(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.
41 Rules as to presentment for acceptance, and excuses for non-

presentment

(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 his trustee:
(e) Where authorised 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:
(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.
42 Non-acceptance

When a bill is duly presented for acceptance and is not accepted within the
customary or, if no customary, then within reasonable time, the person
presenting it must treat it as dishonoured by non-acceptance. If he do not, the
holder shall lose his right of recourse against the drawer and indorsers.
43 Dishonour by non-acceptance and its consequences

(1) A bill is dishonoured by non-acceptance —
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(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 the provisions of this Act when a bill is dishonoured by non-
acceptance, an immediate right of recourse against the drawer and
indorsers accrues to the holder, and no presentment for payment is
necessary.
44 Duties as to qualified acceptances

(1) The holder of a bill may refuse to take a qualified acceptance, 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 authorised 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.
The provisions of this sub-section do not apply to a partial acceptance,
whereof due notice has been given Where a foreign bill has been
accepted as to part, it must be protested as to the balance.
(3) When the drawer or endorser 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.
45 Rules as to presentment for payment

Subject to the provisions of this Act a bill must be duly presented for payment.
If it be not so presented the drawer and indorsers shall be discharged.
A bill is duly presented for payment which is presented in accordance with the
following rules —
(1) Where the bill is not payable on demand, presentment must be made on
the day it falls due.
(2) Where the bill is payable on demand, then, subject to the provisions of
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 endorsement, 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 regard to similar bills, and the
facts of the particular case.
(3) Presentment must be made by the holder or by some person authorised
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
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by the bill as payer, or to some person authorised to pay or refuse
payment on his behalf if with the exercise of reasonable diligence such
person can there be found.
(4) A bill is presented at the proper place —
(a) Where a place of payment is specified in the bill and the bill is
there presented.
(b) 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.
(c) Where no place of payment is specified and no address given, and
the bill is presented at the drawee’s or acceptor’s place of business
is known, and if not, at his ordinary residence if known.
(d) In any other case if presented to the drawee or acceptor wherever
he can be found, or if presented at his last known place of
business or residence.
(5) Where a bill is presented at the proper place, and after the exercise of
reasonable diligence no person authorised to pay or refuse payment can
be found there, no further presentment to the drawee or acceptor is
required.
(6) 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.
(7) 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 be, and with the exercise of reasonable diligence he can be
found.
(8) Where authorised by agreement or usage a presentment through the post
office is sufficient.
46 Excuses for delay or non-presentment for payment

(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. 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, presentment, 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 dispense with the necessity for
presentment.
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c AT 1 of 1883 Page 23

(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 presented.
(e) By waiver of presentment, express or implied.
47 Dishonour by non-payment

(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 the provisions of this Act, when a bill is dishonoured by non-
payment, an immediate right of recourse against the drawer and
indorsers accrues to the holder.
48 Notice of dishonour and effect of non-notice

Subject to the provisions of this Act, when a bill has been dishonoured by non-
acceptance 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 —
(1) Where a bill is dishonoured by non-acceptance, and notice of dishonour
is not given, the rights of a holder in due course subsequent to the
omission shall not be prejudiced by the omission.
(2) 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 shall in the
meantime have been accepted.
49 Rules as to notice of dishonour

Notice of dishonour in order to be valid and effectual must be given in
accordance with the following rules —
(1) 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.
(2) 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.
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Page 24 AT 1 of 1883 c

(3) 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.
(4) Where notice is given by or on behalf of an indorser entitled 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.
(5) The notice may be given in writing or by personal communication, and
may be given in any terms which sufficiently identify the bill, and
intimate that the bill has been dishonoured by non-acceptance or non-
payment.
(6) The return of a dishonoured bill to the drawer or an indorser is, in point
of form, deemed a sufficient notice of dishonour.
(7) A written notice need not be signed, and an insufficient written notice
may be supplemented and validated by verbal communication. A
misdescription of the bill shall not vitiate the notice unless the party to
whom the notice is given is in fact misled thereby.
(8) 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.
(9) Where the drawer or indorser is dead, and the party giving notice knows
it, the notice must be given to a personal representative, if such there be,
and with the exercise of reasonable diligence he can be found.
(10) Where the drawer or indorser is bankrupt, notice may be given either to
the party himself or to the trustee.
(11) 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.
(12) The notice may be given as soon as the bill is dishonoured, and must be
given within a reasonable time hereafter.
In the absence of special circumstances notice is not deemed to have been
given within a reasonable time, unless —
(a) where the person giving and the person to receive 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.
(b) where the person giving and the person to receive notice reside in
different places, the notice is sent off on the day after the
dishonour of the bill, if there be a post at a convenient hour on the
day, and if there be no such post on that day then by the next post
thereafter.
(13) Where a bill when dishonoured is in the hands of an agent, he may either
himself give notice to the parties liable on the bill, or he may give notice
to his principal. If he give notice to his principal, he must do so within
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c AT 1 of 1883 Page 25

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.
(14) 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.
(15) 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.
50 Excuses for non-notice and delay

(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. 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:
(c) As regards the drawer in the following cases, namely, (1) where
drawer and drawee are the same person, (2) where the drawee is a
fictitious person or a person not having capacity to contract, (3)
where the drawer is the person to whom the bill is presented for
payment, (4) where the drawee or acceptor is as between himself
and the drawer under no obligation to accept or pay the bill, (5)
where the drawer has countermanded payment:
(d) As regards the indorser in the following cases, namely, (1) where
the drawee is a fictitious person or a person not having capacity to
contract and the indorser was aware of the fact at the time he
indorsed the bill, (2) where the indorser is the person to whom the
bill is presented for payment, (3) where the bill was accepted or
made for his accommodation.
51 Noting or protest of bill

(1) Where an inland bill has been dishonoured it may, if the holder think 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.
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(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. If it be not so protested the drawer
and indorsers are discharged. Where a bill does not appear on the face of
it to be a foreign bill, protest thereof in case of dishonour is unnecessary.
(3) A bill which has been protested for non-acceptance may be subsequently
protested for non-payment.
(4) Subject to the provisions of this Act when a bill is noted or protested, it
may be noted on the day of the 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.2

(5) Where the acceptor of a bill becomes bankrupt or insolvent, or suspends
payment before it matures, the holder may cause the bill to be protested
for better security against the drawer and indorsers.
(6) A bill must be protested at the place where it is dishonoured:
Provided that —
(a) When a bill is presented through the post office, and returned 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 expressed to be payable, and no further presentment
for payment to, or demand on, the drawee is necessary.
(7) 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.
(8) 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.
(9) Protest is dispensed with by any circumstance which would dispense
with notice of dishonour. Delay in noting or protesting is excused when
the delay is caused by circumstances beyond the control of the holder,
and not imputable to his default, misconduct, or negligence. When the
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c AT 1 of 1883 Page 27

cause of delay ceases to operate the bill must be noted or protested with
reasonable diligence.
52 Duties of holder as regards drawee or acceptor

(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 stipulation 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 necessary 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.
(5) Subsection (4) above —
(a) so far as relating to presenting a bill for payment, shall not apply
to presenting a cheque for payment under section 74B of this Act;
and
(b) so far as relating to a bill which is paid, shall not apply to a
cheque which is paid following presentment under that section.3

Liabilities of Parties
53 Funds in hands of drawee

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 drawee of a bill who does not
accept as required by this Act is not liable on the instrument.
54 Liability of acceptor

The acceptor of a bill, by accepting it —
(1) Engages that he will pay it according to the tenor of his acceptance:
(2) Is precluded from denying to a holder in due course:
(a) The existence of the drawer, the genuineness of his signature, and
his capacity and authority to draw the bill;
(b) In the case of a bill payable to drawer’s order, the then capacity of
the drawer to indorse, but not the genuineness or validity of his
endorsement;
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(c) In the case of a bill payable to the order of a third person, the
existence of the payee and his then capacity to indorse, but not the
genuineness or validity of his endorsement.
55 Liability of drawer or indorser

(1) The drawer of a bill by drawing it —
(a) Engages that on due presentment it shall be accepted and paid
according to its tenor, and that if it be dishonoured he will
compensate the holder or any indorser who is compelled to pay it,
provided that the requisite proceedings on dishonour be duly
taken;
(b) Is precluded from denying to a holder in due course the existence
of the payee and his then capacity to indorse.
(2) The indorser of a bill by indorsing it —
(a) Engages that on due presentment it shall be accepted and paid
according to its tenor, and that if it be dishonoured he will
compensate the holder or a subsequent indorser who is compelled
to pay it, provided that the requisite proceedings on dishonour be
duly taken;
(b) Is precluded from denying to a holder in due course the
genuineness and regularity in all respects of the drawer’s
signature and all previous indorsements;
(c) Is precluded from denying to his immediate or a subsequent
indorsee that the bill was at the time of his indorsement a valid
and subsisting bill, and that he had then a good title thereto.
56 Stranger signing bill liable as indorser

When a person signs a bill otherwise than as drawer or acceptor, he thereby
incurs the liabilities of an indorser to a holder in due course.
57 Measure of damages against parties to dishonoured bill

Where a bill is dishonoured, the measure of damages, which shall be deemed to
be liquidated damages, shall be as follows:
(1) The holder may recover from any party liable on the bill, and the drawer
who has been compelled to pay the bill may recover from the acceptor,
and an indorser who has been compelled to pay the bill may recover
from the acceptor or from the drawer, or from a prior indorser —
(a) The amount of the bill:
(b) Interest thereon from the time of presentment for payment if the
bill is payable on demand, and from the maturity of the bill in any
other case:
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c AT 1 of 1883 Page 29

(c) The expenses of noting, or, when protest is necessary, and the
protest has been extended, the expenses of protest.
(2) [Repealed]4

(3) Where by this Act interest may be recovered as damages, such interest
may, if justice require it, be withheld wholly or in part, and where a bill
is expressed to be payable with interest at a given rate, interest as
damages may or may not be given at the same rate as interest proper.
58 Transferor by delivery and transferee

(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 warrants 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
59 Payment in due course

(1) A bill is discharged by payment in due course by or on behalf of the
drawee or acceptor.
‘Payment in due course’ means payment made at or after the maturity of
the bill to the holder thereof in good faith and without 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 indorsements, and again negotiate the bill.
(3) Where an accommodation bill is paid in due course by the party
accommodated the bill is discharged.
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60 Banker paying demand draft whereon indorsement forged

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, and without negligence, 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 purports 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.

61 Acceptor the holder at maturity

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.
62 Express waiver

(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.
The renunciation must be in writing, unless the bill is delivered up to the
acceptor.
(2) 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 notice of the
renunciation.
63 Cancellation

(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 unintentionally, or
under a mistake, or without authority.
64 Alteration of bill

(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
The Bills of Exchange Act 1883 Section 65


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has himself made, authorised, 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 altered, and may
enforce payment of it according to its original tenor.
(2) In particular the following alterations are material, namely, 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 addition of a
place of payment without the acceptor’s assent.
Acceptance and Payment for Honour
65 Acceptance for honour supra protest

(1) Where a bill of exchange has been protested for dishonour by non-
acceptance, or protested for better security, and is not overdue, 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 in order to be valid must —
(a) Be written on the bill, and indicate that it is an acceptance 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.
66 Liability of acceptor for honour

(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 receives notice of
these facts.
Section 67 The Bills of Exchange Act 1883


Page 32 AT 1 of 1883 c

(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 accepted.
67 Presentment to acceptor for honour

(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 acceptor 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 presented 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 the 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.
68 Payment for honour supra protest

(1) Where a bill has been protested for non-payment, any person 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 parties 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 notarial act of honour,
which may be appended to the protest or form an extention of it.
(4) The notarial act of honour must be founded on a declaration 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 subsequent 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
The Bills of Exchange Act 1883 Section 69


c AT 1 of 1883 Page 33

both the bill itself and the protest. If the holder do not on demand deliver
them up he shall be liable to the payer for honour in damages.
(7) Where the holder of a bill refuses to receive payment supra protest he
shall lose his right of recourse against any party who would have been
discharged by such payment.
Lost Instruments
69 Holder’s right to duplicate of lost bill

Where a bill has been lost before it is overdue, the person who was the holder of
it may apply to the drawer to give him another bill of the same tenor giving
security to the drawer, if required to indemnify him against all persons
whatever in case the bill alleged to have been lost shall be found again.
If the drawer on request as aforesaid refuses to give such duplicate bill, he may be
compelled to do so.
70 Action on lost bill

In any action or proceeding upon a bill, the court or a judge may order that the
loss of the instrument shall not be set up, provided an indemnity be given to the
satisfaction of the court or judge against the claims of any other person upon the
instrument in question.
Bill in a Set
71 Rules as to sets

(1) Where a bill is drawn in a set, each part of the set being numbered, and
containing a reference to the other parts, the whole of the parts constitute
one bill.
(2) Where the holder of a set indorses two or more parts to different persons,
he is liable on every such part, and every indorser subsequent to him is
liable on the part he has himself indorsed as if the said parts were
separate bills.
(3) Where two or more parts of a set are negotiated to different holders in
due course, the holder whose title first accrues is as between such
holders deemed the true owner of the bill; but nothing in this sub-section
shall affect the rights of a person who in due course accepts or pays the
part first presented to him.
(4) The acceptance may be written on any part, and it must be written on
one part only.
If the drawee accepts more than one part, and such accepted parts get
into the hands of different holders in due course, he is liable on every
such part as if it were a separate bill.
Section 72 The Bills of Exchange Act 1883


Page 34 AT 1 of 1883 c

(5) When the acceptor of a bill drawn in a set pays it without requiring the
part bearing his acceptance to be delivered up to him, and that part at
maturity is outstanding in the hands of a holder in due course, he is
liable to the holder thereof.
(6) Subject to the preceding rules, where any one part of a bill drawn in a set
is discharged by payment or otherwise, the whole bill is discharged.
Conflict of Laws
72 Rules where laws conflict

Where a bill drawn in one country is negotiated, accepted, or payable in
another, the rights, duties, and liabilities of the parties thereto are determined as
follows:
(1) The validity of a bill as regards requisites in form is determined by the
law of the place of issue, and the validity as regards requisites in form of
the supervening contracts, such as acceptance, or indorsement, or
acceptance supra protest, is determined by the law of the place where
such contract was made.
Provided that —
(a) Where a bill is issued out of the Isle of Man it is not invalid by
reason only that it is not stamped in accordance with the law of
the place of issue:
(b) Where a bill, issued out of the Isle of Man, conforms, as regards
requisites in form, to the law of the Isle of Man, it may, for the
purpose of enforcing payment thereof, be treated as valid as
between all persons who negotiate, hold, or become parties to it in
the Isle of Man.
(2) Subject to the provisions of this Act, the interpretation of the drawing,
indorsement, acceptance, or acceptance supra protest of a bill, is
determined by the law of the place where such contract is made.
Provided that where an inland bill is indorsed in a foreign country the
indorsement shall as regards the payer be interpreted according to the
law of the Isle of Man.
(3) The duties of the holder with respect to presentment for acceptance or
payment and the necessity for or sufficiency of a protest or notice of
dishonour, or otherwise, are determined by the law of the place where
the act is done or the bill is dishonoured.
(4) [Repealed]5

(5) Where a bill is drawn in one country and is payable in another, the due
date thereof is determined according to the law of the place where it is
payable.
The Bills of Exchange Act 1883 Section 73


c AT 1 of 1883 Page 35

PART III – CHEQUES ON A BANKER

73 Cheque defined

A cheque is a bill of exchange drawn on a banker payable on demand.
Except as otherwise provided in this Part, the provisions of this Act applicable
to a bill of exchange payable on demand apply to a cheque.
73A Cheques in the Manx language

(1) Where a cheque is —
(a) drawn on a banker who is licensed under section 7 of the Financial
Services Act 2008; and6

(b) presented for payment in the Isle of Man,
payment shall not be refused on the ground only that the cheque or any
part of it is in the Manx language.
(2) Except as expressly provided in subsection (1), that subsection is without
prejudice to any rule of law relating to the validity of bills which are
drawn in a language other than English.7

74 Presentment of cheque for payment

Subject to the provisions of this Act —
(1) Where a cheque is not presented for payment within a reasonable time of
its issue, and the drawer or the person on whose account it is drawn had
the right at the time of such presentment as between him and the banker
to have the cheque paid and suffers actual damage through the delay, he
is discharged to the extent of such damage, that is to say, to the extent to
which such drawer or person is a creditor of such banker to a larger
amount than he would have been had such cheque been paid.
(2) In determining what is a reasonable time regard shall be had to the
nature of the instrument, the usage of trade and of bankers, and the facts
of the particular case.
(3) The holder of such cheque as to which such drawer or person is
discharged shall be a creditor, in lieu of such drawer or person, of such
banker to the extent of such discharge, and entitled to recover the
amount from him.
74A Presentment of cheque for payment: alternative place of presentment

Where a banker on whom a cheque is drawn —
(a) has by notice published in two newspapers published and
circulating in the Isle of Man specified an address at which
cheques drawn on him may be presented; and
Section 75 The Bills of Exchange Act 1883


Page 36 AT 1 of 1883 c

(b) has not by notice so published cancelled the specification of that
address,
the cheque is also presented at the proper place if it is presented there.8

74B Presentment of cheque for payment: alternative means of presentment

by banker

(1) A banker may present a cheque for payment to the banker on whom it is
drawn by notifying him of its essential features by electronic means or
otherwise, instead of by presenting the cheque itself.
(2) If a cheque is presented for payment under this section, presentation
need not be made at the proper place or at a reasonable hour on a
business day.
(3) If, before the close of business on the next business day following
presentment of a cheque under this section, the banker on whom the
cheque is drawn requests the banker by whom the cheque was presented
to present the cheque itself —
(a) the presentment under this section shall be disregarded, and
(b) this section shall not apply in relation to the subsequent
presentment of the cheque.
(4) A request under subsection (3) above for the presentment of a cheque
shall not constitute dishonour of the cheque by non-payment.
(5) Where presentment of a cheque is made under this section, the banker
who presented the cheque and the banker on whom it is drawn shall be
subject to the same duties in relation to the collection and payment of the
cheque as if the cheque itself had been presented for payment.
(6) For the purposes of this section, the essential features of a cheque are —
(a) the serial number of the cheque;
(b) the code which identifies the banker on whom the cheque is
drawn;
(c) the account number of the drawer of the cheque; and
(d) the amount of the cheque as entered by the drawer of the cheque.9

75 Revocation of banker’s authority

The duty and authority of a banker to pay a cheque drawn on him by his
customer are determined by —
(1) Countermand of payment:
(2) Notice of the customer’s death.
The Bills of Exchange Act 1883 Section 76


c AT 1 of 1883 Page 37

Crossed Cheques
76 General and special crossings defined

(1) Where a cheque bears across its face an addition of —
(a) The words ‘and company’ or any abbreviation thereof between
two parallel transverse lines, either with or without the words
‘not negotiable’; or
(b) Two parallel transverse lines simply either with or without the
words ‘not negotiable’;
that addition constitutes a crossing, and the cheque is crossed generally.
(2) Where a cheque bears across its face an addition of the name of a banker,
either with or without the words ‘not negotiable’, that addition
constitutes a crossing, and the cheque is crossed specially and to that
banker.
77 Crossing by drawer or after issue

(1) A cheque may be crossed generally or specially by the drawer.
(2) Where a cheque is uncrossed, the holder may cross it generally or
specially.
(3) Where a cheque is crossed generally the holder may cross it specially.
(4) Where a cheque is crossed generally or specially, the holder may add the
words ‘not negotiable’.
(5) Where a cheque is crossed specially, the banker to whom it is crossed
may again cross it specially to another banker for collection.
(6) Where an uncrossed cheque, or a cheque crossed generally, is sent to a
banker for collection, he may cross it specially to himself.
78 Crossing a material part of cheque

A crossing authorised by this Act is a material part of the cheque; it shall not be
lawful for any person to obliterate or, except as authorised by this Act, to add to
or alter the crossing.
79 Duties of banker as to crossed cheques

(1) Where a cheque is crossed specially to more than one banker except
when crossed to an agent for collection being a banker, the banker on
whom it is drawn shall refuse payment thereof.
(2) Where the banker on whom a cheque is drawn which is so crossed
nevertheless pays the same, or pays a cheque crossed generally
otherwise than to a banker, or if crossed specially otherwise than to the
banker to whom it is crossed, or his agent for collection being a banker,
Section 80 The Bills of Exchange Act 1883


Page 38 AT 1 of 1883 c

he is liable to the true owner of the cheque for any loss he may sustain
owing to the cheque having been so paid.
Provided that where a cheque is presented for payment which does not
at the time of presentment appear to be crossed, or to have had a
crossing which has been obliterated, or to have been added to or altered
otherwise than as authorised by this Act, the banker paying the cheque
in good faith and without negligence shall not be responsible or incur
any liability, nor shall the payment be questioned by reason of the
cheque having been crossed, or of the crossing having been obliterated or
having been added to or altered otherwise than as authorised by this Act,
and of payment having been made otherwise than to a banker or to the
banker to whom the cheque is or was crossed, or to his agent for
collection being a banker, as the case may be.
80 Protection to banker and drawer where cheque crossed

(1) Where the banker, on whom a crossed cheque (including a cheque which
under section 81A below or otherwise is not transferable) is drawn, in
good faith and without negligence pays it, if crossed generally, to a
banker, and if crossed specially, to the banker to whom it is crossed, or
his agent for collection being a banker, the banker paying the cheque,
and, if the cheque has come into the hands of the payee, the drawer, shall
respectively be entitled to the same rights and be placed in the same
position as if payment of the cheque had been made to the true owner
thereof.10

(2) A banker is not to be treated for the purposes of this section as having
been negligent by reason only of his failure to concern himself with any
purported indorsement of a cheque which under section 81A below or
otherwise is not transferable.11

81 Effect of crossing on holder

Where a person takes a crossed cheque which bears on it the words ‘not
negotiable’, he shall not have and shall not be capable of giving a better title to
the cheque than that which the person from whom he took it had.
81A Non-transferable cheques

Where a cheque is crossed and bears across its face the words ‘account payee’ or
‘a/c payee’, either with or without the words ‘only’, the cheque shall not be
transferable, but shall only be valid as between the parties thereto.12

The Bills of Exchange Act 1883 Section 82


c AT 1 of 1883 Page 39

82 [Repealed]
13

PART IV – PROMISSORY NOTES

83 Promissory note defined

(1) A promissory note is an unconditional promise in writing made by one
person to another signed by the maker, engaging 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 in the form of a note payable to maker’s order is not a
note within the meaning of this section unless and until it is indorsed by
the maker.
(3) A note is not invalid by reason only that it contains also a pledge of
collateral security with authority to sell or dispose thereof.
(4) A note which is, or on the face of it purports to be, both made and
payable within the British Islands is an inland note. Any other note is a
foreign note.
84 Delivery necessary

A promissory note is inchoate and incomplete until delivery thereof to the
payee or bearer.
85 Joint and several notes

(1) A promissory note may be made by two or more makers, and they may
be liable thereon jointly, or jointly and severally, according to its tenor.
(2) Where a note runs ‘I promise to pay’ and is signed by two or more
persons it is deemed to be their joint and several note.
86 Note payable on demand

(1) From and after the promulgation of this Act, where a note payable on
demand has been indorsed, it must be presented for payment within a
reasonable time of the indorsement. If it be not so presented the indorser
is discharged.
(2) In determining what is a reasonable time, regard shall be had to the
nature of the instrument, the usage of trade, and the facts of the
particular case.
(3) Where a note payable on demand is negotiated, it is not deemed to be
overdue, for the purpose of affecting the holder with defects of title of
which he had no notice, by reason that it appears that a reasonable time
for presenting it for payment has elapsed since its issue.
Section 87 The Bills of Exchange Act 1883


Page 40 AT 1 of 1883 c

87 Presentment of note for payment

(1) Where a promissory note is in the body of it made payable at a particular
place, it must be presented for payment at that place in order to render
the maker liable. In any other case, presentment for payment is not
necessary in order to render the maker liable.
(2) Presentment for payment is necessary in order to render the indorser of a
note liable.
(3) Where a note is in the body of it made payable at a particular place,
presentment at that place is necessary in order to render an indorser
liable; but when a place of payment is indicated by way of memorandum
only, presentment at that place is sufficient to render the endorser liable,
but a presentment to the maker elsewhere, if sufficient in other respects,
shall also suffice.
88 Liability of maker

The maker of a promissory note by making it —
(1) Engages that he will pay it according to its tenor;
(2) Is precluded from denying to a holder in due course the existence of the
payee and his then capacity to endorse.
89 Application of Part II to notes

(1) Subject to the provisions in this Part and, except as by this section
provided, the provisions of this Act relating to bills of exchange apply,
with the necessary modifications, to promissory notes.
(2) In applying those provisions the maker of a note shall be deemed to
correspond with the acceptor of a bill, and the first indorser of a note
shall be deemed to correspond with the drawer of an accepted bill
payable to drawer’s order.
(3) The following provisions as to bills do not apply to notes; namely,
provisions relating to —
(a) Presentment for acceptance;
(b) Acceptance;
(c) Acceptance supra protest;
(d) Bills in a set.
(4) Where a foreign note is dishonoured, protest thereof is unnecessary.
The Bills of Exchange Act 1883 Section 90


c AT 1 of 1883 Page 41

PART V – SUPPLEMENTARY

90 Good faith

A thing is deemed to be done in good faith, within the meaning of this Act,
where it is in fact done honestly, whether it is done negligently or not.
91 Signature

(1) Where, by this Act, any instrument or writing is required to be signed by
any person, it is not necessary that he should sign it with his own hand,
but it is sufficient if his signature is written thereon by some other person
by or under his authority.
(2) In the case of a corporation, where, by this Act, any instrument or
writing is required to be signed, it is sufficient if the instrument or
writing be sealed with the corporate seal.
But nothing in this section shall be construed as requiring the bill or note of a
corporation to be under seal.
92 Computation of time

Where, by this Act, the time limited for doing any act or thing is less than three
days, in reckoning time, non-business days are excluded.
“Non-business days
” for the purposes of this Act mean —
(a) Saturday;
Sunday;14

(b) A bank holiday under the Bank Holidays Act 1989.15

(c) a day declared by a Treasury order, which has effect in the Isle of
Man by virtue of the provisions of section 1(1) of the Banking and
Financial Dealings (Isle of Man) Act 1973, to be a non-business day.16

Any other day is a business day.
93 When noting equivalent to protest

For the purposes of this Act, where a bill or note is required to be protested
within a specified time or before some further proceeding is taken, it is
sufficient that the bill has been noted for protest before the expiration of the
specified time or the taking of the proceeding; and the formal protest may be
extended at any time thereafter as of the date of the noting.
94 Protest when notary not accessible

Where a dishonoured bill or note is authorised or required to be protested, and
the services of a notary cannot be obtained at the place where the bill is
dishonoured, any householder or substantial resident of the place may, in the
Section 95 The Bills of Exchange Act 1883


Page 42 AT 1 of 1883 c

presence of two witnesses, give a certificate, signed by them, attesting the
dishonour of the bill, and the certificate shall in all respects operate as if it were
a formal protest of the bill.
The form given in Schedule 1 to this Act may be used with necessary
modifications, and if used shall be sufficient.
95 Dividend warrants may be crossed

The provisions of this Act as to crossed cheques shall apply to a warrant for
payment of dividend.
96 [Repealed]
17

97 Savings

(1) The rules in bankruptcy relating to bills of exchange, promissory notes,
and cheques, shall continue to apply thereto notwithstanding anything in
this Act contained.
(2) The rules of common law including the law merchant, save in so far as
they are inconsistent with the express provisions of this Act, shall
continue to apply to bills of exchange, promissory notes, and cheques.
(3) Nothing in this Act or in any repeal effected thereby shall affect —
(a) The provisions of ‘The Companies Act 1865’, or Acts amending it,
or any Act relating to joint stock banks or companies:
(b) The provisions of any Act relating to the making and issue of bills,
notes, or other negotiable paper or instrument by way of a
circulating medium:
(c) The validity of any usage relating to dividend warrants, or the
indorsements thereof.
98 Construction with other Acts, etc

Where any Act or document refers to any enactment repealed by this Act, the
Act or document shall be construed, and shall operate, as if it referred to the
corresponding provisions (if any) of this Act.
The Bills of Exchange Act 1883 Schedule 1


c AT 1 of 1883 Page 43

Schedule 1

SECTION 94

Form of protest which may be used when the services of a notary cannot be obtained
Know all men that I, A.B. [householder], of in the parish of ,
in the Isle of Man, at the request of C.D., there being no notary public
available, did on the day of 188 , at
demand payment [or acceptance] of the bill of exchange hereunder
written, from E.F., to which demand he made answer [state answer, if any], wherefore I
now, in the presence of G.H., and J.K., do protest the said bill of exchange.
A.B. (Signed)
G.H.} Witnesses
J.K. }
N.B.-The bill itself should be annexed, or a copy of the bill and all that is written
thereon should be underwritten.
Schedule 2
18

The Bills of Exchange Act 1883 Endnotes


c AT 1 of 1883 Page 45

ENDNOTES

Table of Legislation History

Legislation Year and No Commencement






Table of Renumbered Provisions

Original Current






Table of Endnote References

1
Para (1) substituted with savings by Banking and Financial Dealings (Isle of Man) Act
1973 s 3. 2
Subs (4) amended by Bills of Exchange Act 1958 s 7. 3
Subs (5) added by Banking Act 1998 Sch 1. 4
Para (2) repealed by Civil Jurisdiction Act 2001 s 5 with saving. 5
Para (4) repealed by Civil Jurisdiction Act 2001 s 5 with saving. 6
Para (a) amended by Financial Services Act 2008 Sch 6. 7
S 73A inserted by Banking Act 1998 Sch 1 with saving (see Part II para 4). 8
S 74A inserted by Banking Act 1998 Sch 1. 9
S 74B inserted by Banking Act 1998 Sch 1. 10
Subs (1) amended by Bills of Exchange (Amendment) Act 1993 s 2. 11
Subs (2) added by Bills of Exchange (Amendment) Act 1993 s 2. 12
S 81A inserted by Bills of Exchange (Amendment) Act 1993 s 1. 13
S 82 repealed by Bills of Exchange Act 1958 Sch. 14
Para (a) amended by Banking and Financial Dealings (Isle of Man) Act 1973 s 3. 15
Para (b) amended by Bank Holidays Act 1989 Sch 1. 16
Para (c) added by Banking and Financial Dealings (Isle of Man) Act 1973 s 4. 17
S 96 repealed by Statute Law Revision Act 1983 Sch 2. 18
Sch 2 repealed by Statute Law Revision Act 1983 Sch 2.