Английский язык для юристов. Предпринимательское право
Шрифт:
Payment of an instrument by a maker or drawee usually ends the obligations of the parties. However, if a negotiable instrument is negotiated to a holder in due course after it has been paid, it will have to be paid again. This rule is because payment is a personal defense, which cannot be used against a holder in due course. Because of this rule, anyone who pays a demand instrument should have it marked «paid» and take possession of it. This requirement is not as important with a time instrument, unless it is paid before its due date, because no one can be a holder in due course of a past-due instrument.
No person is liable on an instrument unless that person's signature or the signature of an authorized agent appears on the instrument. Parties to negotiable instruments are either primarily or secondarily liable.
An absolute liability to pay is a primary liability. A party with primary liability promises to pay the instrument without reservations of any kind. Two parties have primary liability: the maker of a promissory note and the acceptor, if any, of a draft.
A liability to pay only after certain conditions have been met is a secondary liability. Two types of parties are secondarily liable on negotiable instruments: the drawer of a draft (a check is the most common kind of draft) and the endorsers of either a note or a draft. The conditions that must be met are as follows: The instrument must be properly presented to the primary party or drawee and payment must be demanded; the instrument must be dishonored, that is, payment refused; and notice of the dishonor must be given to the secondary party within the time and in the manner prescribed by the law. If all three of the above conditions are not met, endorsers are discharged from their obligations. If the drawee cannot pay because of insolvency and all three conditions are not met, the drawer is discharged from all obligations.
To be sure that a secondary party (drawer or endorser) will be liable on an instrument, the holder must make proper presentment for payment unless excused. In other words, the holder must present the instrument to the maker or drawer and ask for payment. Presentment must be made on the date that the instrument is due.
If no due date is stated on the instrument, presentment must be made within a reasonable time after the maker or drawee becomes liable on it. The definition of a reasonable time for instruments other than checks will vary, depending on the circumstances and banking and trade practices.
When the date that an instrument is payable is not a full business day for either person making the presentment or the party paying, presentment is due on the next full business day for both parties. To be sufficient, presentment must be made at a reasonable hour. If presentment is made at a bank, it must take place during the banking day.
The party from whom payment is demanded can request to see the instrument. If payment is made, the instrument must be handed over then and there. This transaction is important because if the party paying does not get the instrument back, it might show up later in the hands of a holder of due course, and the paying party would have to pay it again.
A draft may be presented to the drawee for acceptance as well as for payment. This flexibility is particularly important when a draft is not yet due. The holder is given the opportunity to test the drawee's willingness to honor the instrument. When a draft is presented for acceptance, the drawee is asked to become primarily liable on the instrument. The drawee is asked to agree now to pay the amount of the draft when it is presented for payment at a later date. To accept a draft, the drawee signs the instrument (usually perpendicularly) across its face. It is customary, also, to write the word accepted and the date along with the drawee's signature. When a drawee bank accepts a check, it stamps the word certified across the face of the instrument and signs it. This instrument is known as a certified check.
Although, in most cases, a draft may be presented for either payment or acceptance, there are three situations in which a draft must be presented for acceptance:
• where the draft states that it must be presented for acceptance,
• where the draft is payable elsewhere than at the residence or place of business of the drawee, and
• where the date of payment depends upon presentment, for example, when the draft contains a statement like:
Dishonor means to refuse to pay a negotiable instrument when it is due or to refuse to accept it when asked to do so. An instrument is dishonored when proper presentment is made and acceptance or payment is refused. Dishonor also occurs when presentment is excused and the instrument is past due and unpaid. The presenting party has recourse against endorsers or other secondary parties after notice of dishonor has been given.
If an instrument has been dishonored, the holder must give notice of the dishonor to the drawer and to the endorsers before midnight of the third full business day after the date of dishonor. Unless notice is excused, any endorser who is not given notice within the specified time is discharged. A drawer who is not given notice within the specified time is discharged if the drawee cannot pay because of insolvency. Notice of dishonor may be given, by or on behalf of the holder, to any person who may be liable.
Unless excused, protest of any dishonor is necessary to charge the drawer and endorsers of any draft that on its face appears to be drawn or payable outside the jurisdiction A protest is a certificate of dishonor that states that a draft was presented for acceptance or payment and was dishonored. It also states the reasons given for refusal to accept or pay. It is required for drafts drawn or payable outside the state and optional in all other cases with the holder. A protest is made under the hand and seal of a state consul or vice-consul or of a notary public or other person authorized to certify dishonor by the law where dishonor occurs.
Endorsers who write demand and notice waived or protest waived above their endorsements or across the face of an instrument are liable for payment without subsequent presentment or notice of dishonor. Prior endorsers are excused from their liability to such endorsers.
If a waiver of notice or protest is stated on the face of the instrument, it is binding upon all parties; when written above the signature of an endorser, it binds only the endorser.