TOPIC: Essential Rules of Valid Acceptance
1. Acceptance must be given on the bill:
No specific form is prescribed. However, the acceptance must be given on the bill and it should not be on any other paper. In case the bill is drawn in sets, only one of the copies should be accepted. If the acceptor signs on all the parts, he will be liable to holder in due course as if each part were a separate bill.
2. Acceptance must be signed by the drawee or by his agent, duly authorized in this respect:
Signing on the bill by the drawee, or his duly authorized agent is essential to charge him as a party to the bill. The world “accepted” may or may not be used but signature must be there. Merely writing the word “accepted” without drawee’s signature is not enough.
3. Acceptance must be completed by delivering the instrument to the holder:
Acceptance is complete only when the accepted bill is delivered to the holder.
4. Presentment must be made in time:
Presentment for acceptance must be made at a reasonable time on a business day and before maturity.
5. Not more than 48 hours should be given to accept the bill:
Not more than 48 hours should be allowed to the drawee to consider whether or not he will accept the bill.
To whom Presentment for Acceptance is made?
Obviously, to the drawee. However, presentment for acceptance may be made to the following:
(i) To the drawee himself or his duly authorized agent.
(ii) To his legal representative, if the drawee, before acceptance, has died.
(iii) To his Official Receiver or Assignee if the drawee, before acceptance, has been declared insolvent (Sec.75).
(iv) To drawee in case of need (Sec. 33).
(v) To acceptor for honour (Sec. 108).
(vi) To all the drawees, in case there are more drawees and they are not partners. In case they are partners, to any of the drawees (Sec. 34).
It should be noted that a partner or an agent can accept a bill on behalf of others only when he has express or implied authority to accept the bills.
You May Also Like To Read : Noting and Protest
Thanks For Reading: Essential Rules of Valid Acceptance
Powered By 360Presence