Scribd Logo
Upload

Welcome to Scribd!

  • 9 views

    Negotiable Assignment

    Uploaded by

    nigussetarekegn74

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    Negotiable Assignment

    Uploaded by

    nigussetarekegn74
    9 views2 pages

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    9 views2 pages

    Negotiable Assignment

    Uploaded by

    nigussetarekegn74

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    You are on page 1of 2

    DISHONOR OF COMMERCIAL INSTRUMENTS

    Dishonour of a negotiable instrument means the loss of honour for the instrument on the part
    of the maker, drawee or acceptor, which renders the instrument unsuitable for the realization
    of the payment. negotiable instrument is a document that guarantees the payment of a sum of
    money, either on demand or at a set time, with the payer usually named on the document.

    Dishonor is either by non acceptance or non payment. Dishonor by non payment, if the maker,
    drawee or acceptor of the cheque commits default in payment upon being required to do the
    same. Dishonour by non-acceptance is a situation of refusal to accept a negotiable instrument.A
    bank or other financial institution can choose to dishonor an instrument if the institution has a
    valid reason to do so such as fraud, forgery, or insolvency of the person who originally gave the
    instrument to the drawer

    Dishonour can be made if the maker, drawer or acceptor actively does something so as to
    intentionally obstruct the presentment of the instrument, e.g., deprives the holder of the
    instrument and keeps it after maturity or In a situation, when there is no person present to
    make payment at the specified place for paymen or when the party entitled to presentment
    waives the presentment in an express or implied manner etc.

    The commercial code provided conditions requirement for dishonor by non acceptance or non
    payment. Default of acceptance or of payment shall be evidenced by a deed drawn up by a
    public officer (protest for non acceptance or non payment)1.

    The holder can protest the non acceptance or non payment, that protest shall be drawn up by a
    notary or a court registrar.2 The protest shall be drawn up by separate act and attached to the
    bill of exchange. The protest shall contain name of the person or business organization against
    whom it's drawn up, statement that the person or business organization whom the instrument
    drawn up is unsuccessful to satisfy the right out of the instrument,day and place that
    unsuccessful right entitlement was presented, signature of the protestor, partial payment (if
    any).3 The protest shall be made at domicile of the person to whom the bill of exchange was
    payable, domicile of third party who accepted payment by intervention or domicile of person
    specified in the bill of exchange as paying it In need.4

    1
    The 1960 Ethiopian commercial code, Article 788(1).

    2
    Id, article 782.

    3
    Id, article 784

    4
    The 1960 Commercial code, article 783.
    Protest for non acceptance shall be made within limit of time fixed for presentment for
    acceptance and presentment for payment and protest for non payment shall not be necessary
    where protest for non acceptance is made.5 Article 757 provided that the holder or the drawer
    can present the bill of exchange to the drawee to his domicile untill the maturity date of the bill
    of exchange. If the drawee protest for non acceptance he shall be make it within the date, that
    is upto the maturity date for payment. And if he made that then protest for non payment is
    unnecessary.

    The drawee can also make partial acceptance as per article 786 which states;

    "Where acceptance is limited to a part of the amount and a protest is drawn up to this effect, a
    copy of the bill shall be made and the protest written on this copy."

    A notice of dishonor is given to a party that does not fulfill its part of a contract. The notice can
    be given orally, written, or sent electronically. The holder also have to notice the non
    acceptance or non payment to the endorser. The Commercial code provided for days for this
    (for the holder to notify).6

    5
    Id, article 781(2&5)

    6
    Id, article 788(1)

    You might also like