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.

An instrument that does not comply with these conditions, or that orders any act to be done in addition to the payment of money, is not a bill of exchange.

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 reimburse himself or herself or a particular account to be debited with the amount, or (b) a statement of the transaction giving rise to the bill, is unconditional.

A bill is not invalid by reason that—

An inland bill is a bill that is, or on the face of it purports to be,—

Any other bill is a foreign bill.

Unless the contrary appears on the face of the bill the holder may treat it as an inland bill.

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.

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 or her option, either as a bill of exchange or as a promissory note.

The drawee must be named or otherwise indicated in a bill with reasonable certainty.

A bill may be addressed to 2 or more drawees, whether they are partners or not; but an order addressed to 2 drawees in the alternative, or to 2 or more drawees in succession, is not a bill of exchange.

Where a bill is not payable to bearer, the payee must be named or otherwise indicated therein with reasonable certainty.

A bill may be made payable—

Where the payee is a fictitious or non-existing person the bill may be treated as payable to bearer.

Where a bill contains words prohibiting transfer, or indicating an intention that it is not transferable, it is valid as between the parties thereto, but is not negotiable.

A negotiable bill may be payable either to order or to bearer.

A bill is payable to bearer if it is expressed to be so payable, or if the only or the last indorsement thereon is an indorsement in blank.

A bill is payable to order if it is expressed to be so payable, or if it is expressed to be payable to a particular person, and does not contain words prohibiting transfer or indicating an intention that it is not transferable.

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 her or his or her order, it is nevertheless payable to him or her or his or her order at his or her option.

The sum payable by a bill is a sum certain within the meaning of this Act, although it is required to be paid—

Where the sum payable is expressed in words and also in figures, and there is a discrepancy between the 2, the sum denoted by the words is the amount payable.

Where a bill is expressed to be payable with interest, unless the instrument provides otherwise, interest runs from the date of the bill, and, if the bill is undated, from the issue thereof.

A bill is payable on demand—

Where a bill is accepted or indorsed when it is overdue, it shall, as regards the acceptor who so accepts, or any indorser who so indorses it, be deemed a bill payable on demand.

A bill is payable at a determinable future time within the meaning of this Act if it is expressed to be payable—

An instrument expressed to be payable on a contingency is not a bill, and the happening of the event does not cure the defect.

Where a bill expressed to be payable at a fixed period after date is issued undated, or where the acceptance of a bill payable at a fixed period after sight is undated, any holder may insert therein the true date of issue or acceptance, and the bill shall be payable accordingly:

Where a bill or an acceptance or any indorsement on a bill is dated, the date shall, unless the contrary is proved, be deemed to be the true date of the drawing, acceptance, or indorsement, as the case may be.

A bill is not invalid by reason only that it is antedated or post-dated, or that it bears date on a Sunday.

Where a bill is not payable on demand, the day on which it falls due is determined as follows:

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 or she thinks fit.

The drawer of a bill, and any indorser, may insert therein an express stipulation—

The acceptance of a bill is the signification by the drawee of his or her assent to the order of the drawer.

An acceptance is invalid unless it complies with the following conditions, namely:

A bill may be accepted—

Where 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 on the date of its first presentment to the drawee for acceptance.

An acceptance is either (a) general, or (b) qualified.

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—

Where a simple signature on a blank stamped paper is delivered by the signer in order that it may be converted into a bill, it operates as a prima facie authority to fill it up as a complete bill for any amount the stamp will cover, using the signature for that of the drawer, or the acceptor, or an indorser; and in like manner, where 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 or she thinks fit.

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:

Every contract on a bill, whether it is 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:

As between immediate parties, and as regards a remote party other than the holder in due course, the delivery—

If the bill is in the hands of a holder in due course, a valid delivery of the bill by all parties prior to him or her so as to make them liable to him or her is conclusively presumed.

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 or her is presumed until the contrary is proved.

Capacity to incur liability as a party to a bill is co-extensive with capacity to contract:

Where a bill is drawn or indorsed by a minor or corporation, having no capacity or power to incur liability on a bill, the drawing or indorsement entitles the holder to receive payment of the bill and to enforce it against any other party thereto.

No person is liable as drawer, indorser, or acceptor of a bill unless he or she has signed it as such:

Subject to the provisions of this Act, where a signature on a bill is forged, or is 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.

Nothing in this section shall affect the ratification of an unauthorised signature not amounting to a forgery.

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

Where a person signs a bill as drawer, indorser, or acceptor, and adds words to his or her signature indicating that he or she signs for or on behalf of a principal, or in a representative character, he or she is not personally liable thereon; but the mere addition to his or her signature of words describing him or her as an agent, or as filling a representative character, does not exempt him or her from personal liability.

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.

Valuable consideration for a bill may be constituted by—

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 that time.

Where the holder of a bill has a lien on it, arising either from contract or by implication of law, he or she is deemed to be a holder for value to the amount of the sum for which he or she has a lien.

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 or her name to some other person.

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 or she knew such party to be an accommodation party or not.

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:

In particular, the title of a person who negotiates a bill is defective within the meaning of this Act when he or she 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 or she negotiates it in breach of faith, or under such circumstances as amount to a fraud.

A holder (whether for value or not) who derives his or her title to a bill through a holder in due course, and who is not himself or herself 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.

Every party whose signature appears on a bill is prima facie deemed to have become a party thereto for value.

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—

the burden of proof is shifted, unless and until the holder proves that,—

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.

A bill payable to bearer is negotiated by delivery.

A bill payable to order is negotiated by the indorsement of the holder completed by delivery.

Where the holder of a bill payable to his or her 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.

Where any person is under obligation to indorse a bill in a representative capacity, he or she may indorse the bill in such terms as to negative personal liability.

An indorsement in order to operate as a negotiation must comply with the following conditions, namely:

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.

An indorsement in blank specifies no indorsee, and a bill so indorsed becomes payable to bearer.

A special indorsement specifies the person to whom, or to whose order, the bill is to be payable.

The provisions of this Act relating to a payee apply, with the necessary modifications, to an indorsee under a special indorsement.

Where 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 herself or some other person.

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 is indorsed “Pay D only”, or “Pay D for the account of X”, or “Pay D or order for collection”.

A restrictive indorsement gives the indorsee the right to receive payment of the bill, and to sue any party thereto that his or her indorser could have sued, but gives him or her no power to transfer his or her rights as indorsee unless it expressly authorises him or her to do so.

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.

Where a bill is negotiable in its origin, it continues to be negotiable until it has been either restrictively indorsed, or discharged by payment or otherwise.

Where an overdue bill is negotiated, it can be negotiated only 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 or she took it had.

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.

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 became overdue.

Where a bill that 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.

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, reissue and further negotiate the bill; but he or she is not entitled to enforce payment of the bill against any intervening party to whom he or she was previously liable.

The rights and powers of the holder of a bill are as follow:

Where a bill is payable after sight, presentment for acceptance is necessary in order to fix the maturity of the instrument.

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.

In no other case is presentment for acceptance necessary in order to render liable any party to the bill.

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.

Subject to the provisions of this Act, where a bill payable after sight is negotiated, the holder must either present it for acceptance or negotiate it within a reasonable time.

If he or she does not do so, the drawer and all indorsers prior to that holder are discharged to the extent that they are prejudiced by the omission.

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.

A bill is duly presented for acceptance if it is presented in accordance with the following rules:

Presentment in accordance with these rules is excused, and a bill may be treated as dishonoured by non-acceptance,—

The fact that the holder has reason to believe that the bill, on presentment, will be dishonoured does not excuse presentment.

Where a bill is duly presented for acceptance and is not accepted within the customary time, the person presenting it must treat it as dishonoured by non-acceptance. If he or she does not, the holder shall lose his or her right of recourse against the drawer and indorsers to the extent that they are prejudiced by the omission.

A bill is dishonoured by non-acceptance—

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.

The holder of a bill may refuse to take a qualified acceptance, and if he or she does not obtain a general acceptance may treat the bill as dishonoured by non-acceptance.

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 or her liability on the bill. The provisions of this subsection 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.

Where the drawer or indorser of a bill receives notice of a qualified acceptance, and does not within a reasonable time express his or her dissent to the holder, he or she shall be deemed to have assented thereto.

Subject to the provisions of this Act, a bill must be duly presented for payment. If it is not so presented, the drawer and indorsers shall be discharged to the extent that they are prejudiced by the omission.

A bill is duly presented for payment if it is presented in accordance with the following rules:

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 or her default, misconduct, or negligence. When the cause of delay ceases to operate, presentment must be made with reasonable diligence.

Presentment for payment is dispensed with—

A bill is dishonoured by non-payment—

Subject to the provisions of this Act, where a bill is dishonoured by non-payment an immediate right of recourse against the drawers or indorsers accrues to the holder.

Subject to the provisions of this Act, where 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 to the extent that he or she is prejudiced by the omission:

Notice of dishonour in order to be valid and effectual must be given in accordance with the following rules:

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 or her default, misconduct, or negligence. When the cause of delay ceases to operate the notice must be given with reasonable diligence.

Notice of dishonour is dispensed with—

Where an inland bill has been dishonoured it may, if the owner thinks 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.

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, not having been previously dishonoured by non-acceptance, is dishonoured by non-payment it must be duly protested for non-payment, otherwise the drawer and indorsers are discharged to the extent that they are prejudiced by the omission.

Where a bill does not appear on the face of it to be a foreign bill, protest thereof as in case of dishonour is unnecessary.

A bill that has been protested for non-acceptance may be subsequently protested for non-payment.

Subject to the provisions of this Act, where a bill is noted or protested it must be noted on the day of dishonour.

Where a bill has been duly noted, the protest may be subsequently extended so as to take effect from the date of the noting.

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.

A bill must be protested at the place where it is dishonoured:

A protest must contain a copy of the bill, and must be signed by the notary making it, and must specify—

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 on written particulars thereof.

Protest is dispensed with by any circumstance that 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 or her default, misconduct, or negligence. When the cause of delay ceases to operate the bill must be noted or protested with reasonable diligence.

When a bill is accepted generally, presentment for payment is not necessary in order to render the acceptor liable.

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.

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 or her.

When the holder of a bill presents it for payment, he or she shall exhibit the bill to the person from whom he or she demands payment, and when a bill is paid the holder shall forthwith deliver it up to the party paying it.

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.

The acceptor of a bill, by accepting it,—

The drawer of a bill, by drawing it,—

The indorser of a bill, by indorsing it,—

Where a person signs a bill otherwise than as drawer or acceptor, he or she thereby incurs the liabilities of an indorser to a holder in due course.

Where a bill is dishonoured, the measure of damages, which shall be deemed to be liquidated damages, shall be as follows:

Where the holder of a bill payable to bearer negotiates it by delivery without indorsing it, he or she is called a transferor by delivery.

A transferor by delivery is not liable on the instrument.

A transferor by delivery who negotiates a bill thereby warrants to his or her immediate transferee being a holder for value that the bill is what it purports to be, that he or she has a right to transfer it, and that at the time of transfer he or she is not aware of any fact which renders it valueless.

A bill is discharged by payment in due course by or on behalf of the drawee or acceptor.

Payment in due course means payment to the holder of the bill made at or after the maturity thereof in good faith and without notice that the holder’s title is defective.

Subject to the provisions hereinafter contained, when a bill is paid by the drawer or an indorser it is not discharged: but

Where an accommodation bill is paid in due course by the party accommodated the bill is discharged.

Where 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, 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.

Where a banker carries on the business of banking at more branches than 1 he or she shall, for the purposes of this section, be deemed to be an independent banker in respect of each of such branches, and a draft issued by one of such branches and payable at another shall be deemed to be a bill.

Where the acceptor of a bill is or becomes the holder of it in his or her own right, at or after its maturity, the bill is discharged.

Where the holder of a bill at or after its maturity absolutely and unconditionally renounces his or her rights against the acceptor the bill is discharged. The renunciation must be in writing, unless the bill is delivered up to the acceptor.

The liabilities of any party to a bill may in like manner be renounced by the holder before, at, or after its maturity.

Nothing in this section shall affect the rights of a holder in due course without notice of any such renunciation.

Where a bill is intentionally cancelled by the holder or his or her agent, and the cancellation is apparent thereon, the bill is discharged.

Any party liable on a bill may in like manner be discharged by the intentional cancellation of his or her signature by the holder or his or her agent. In such case an indorser who would have had a right of recourse against the party whose signature has been cancelled is also discharged.

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.

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 has himself or herself made, authorised, or assented to the alteration, and subsequent indorsers:

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.

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 on whose account the bill is drawn.

A bill may be accepted for honour for part only of the sum for which it is drawn.

An acceptance for honour supra protest in order to be valid must—

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.

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.

The acceptor for honour of a bill by accepting it engages that he or she will, on due presentment, pay the bill according to the tenor of his or her acceptance, if it is not paid by the drawee, provided that it has been duly presented for payment and protested for non-payment, and that he or she receives notice of these facts.

The acceptor for honour is liable to the holder and to all parties to the bill subsequent to the party for whose honour he or she has accepted.

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.

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 or her 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 for presentment to him or her not later than the day following its maturity.

Delay in presentment, or non-presentment, is excused by any circumstance that would excuse delay in presentment for payment, or non-presentment for payment.

Where a bill is dishonoured by the acceptor for honour it must be protested for non-payment by him or her.

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 on whose account the bill is drawn.

Where 2 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.

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 may form an extension of it.

The notarial act of honour must be founded on a declaration made by the payer for honour, or his or her agent in that behalf, declaring his or her intention to pay the bill for honour, and for whose honour he or she pays.

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 or she pays and all parties liable to that party.

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 both the bill itself and the protest, and if the holder does not deliver them up on demand he or she shall be liable to the payer for honour in damages.

Where the holder of a bill refuses to receive payment supra protest he or she shall lose his or her right of recourse against any party who would have been discharged by such payment.

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 or her another bill of the same tenor, giving security to the drawer if required to indemnify him or her against all persons whatever in case the bill alleged to have been lost is found again.

If the drawer, on request as aforesaid, refuses to give such duplicate bill, he or she may be compelled to do so.

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 is given to the satisfaction of the court or Judge against the claims of any other person upon the instrument in question.

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 1 bill.

Where the holder of a set indorses 2 or more parts to different persons, he or she is liable on every such part, and every indorser subsequent to him or her is liable on the part he or she has himself or herself indorsed as if the said parts were separate bills.

Where 2 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 subsection shall affect the rights of a person who in due course accepts or pays the part first presented to him or her.

The acceptance may be written on any part, and it must be written on 1 part only.

If the drawee accepts more than 1 part, and such accepted parts get into the hands of different holders in due course, he or she is liable on every part as if it were a separate bill.

Where the acceptor of a bill drawn in a set pays it without requiring the part bearing his or her acceptance to be delivered up to him or her, and that part at maturity is outstanding in the hands of a holder in due course, he or she is liable to the holder thereof.

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.

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:

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.

Subject to the provisions of this Act,—

The duty and authority of a banker to pay a cheque drawn on him or her by his or her customer are determined by—

Notwithstanding the provisions of paragraph (b) of subsection (1), a banker may pay a cheque drawn on him or her, notwithstanding that he or she has notice of the death of the customer who drew it, if the cheque is presented not more than 10 days after the date of the customer’s death, unless—

Where a cheque bears across its face an addition of—

that addition constitutes a crossing, and the cheque is crossed generally.

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.

A cheque may be crossed generally or specially by the drawer.

Where a cheque is uncrossed, the holder may cross it generally or specially.

Where a cheque is crossed generally, the holder may cross it specially.

Where a cheque is crossed generally or specially, the holder may add the words “Not negotiable”.

Where a cheque is crossed specially, the banker to whom it is crossed may again cross it specially to another banker for collection.

Where an uncrossed cheque, or a cheque crossed generally, is sent to a banker for collection, the banker may cross it specially to himself or herself.

A crossing authorised by this Act is a material part of the cheque, and no person may obliterate or, except as authorised by this Act, add to or alter the crossing.

Where a cheque is crossed specially to more than 1 banker, except when crossed to an agent for collection being a banker, the banker on whom it is drawn shall refuse payment thereof.

Where the banker on whom a cheque so crossed is drawn 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 or her agent for collection being a banker, he or she is liable to the true owner of the cheque for any loss he or she may sustain owing to the cheque having been so paid.

Where a cheque presented for payment 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 or her agent for collection being a banker, as the case may be.

Where the banker on whom a crossed cheque is drawn pays it in good faith and without negligence, if crossed generally, to a banker, and, if crossed specially, to the banker to whom it is crossed, or to his or her 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.

Where a person takes a crossed cheque bearing on it the words “Not negotiable”, he or she shall not have and shall not be capable of giving a better title to the cheque than that which the person from whom he or she took it had.

Where a banker carries on the business of banking at more branches than 1 he or she shall, for the purposes of sections 76 to 82, be deemed to be an independent banker in respect of each of such branches.

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.

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.

A note is not invalid by reason only that it contains also a pledge of collateral security, with authority to sell or dispose thereof.

A note that is, or on the face of it purports to be, both made and payable in New Zealand is an inland note; any other note is a foreign note.

A promissory note is incomplete until delivery thereof to the payee or bearer.

A promissory note may be made by 2 or more makers, and they may be liable thereon jointly, or jointly and severally, according to its tenor.

Where a note runs “I promise to pay” and is signed by 2 or more persons, it is deemed to be their joint and several note.

Where a note payable on demand is indorsed, it must be presented for payment within a reasonable time of the indorsement. If it is not so presented, the indorser is discharged.

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.

Where a note payable on demand is negotiated, it is not deemed to be overdue, for the purposes of affecting the holder with defects of title of which he or she had no notice, by reason that it appears that a reasonable time for presenting it for payment has elapsed since its issue.

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; but in any other case presentment for payment is not necessary in order to render the maker liable.

Presentment for payment is necessary in order to render the indorser of a note liable.

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 indorser liable, but a presentment to the maker elsewhere, if sufficient in other respects, shall also suffice.

The maker of a promissory note, by making it,—

Subject to the provisions in this Part, and except as provided by this section, the provisions of this Act relating to bills of exchange apply, with the necessary modifications, to promissory notes.

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.

The following provisions as to bills do not apply to notes, namely, provisions relating to—

Where a foreign note is dishonoured, protest thereof is unnecessary.

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.

Where by this Act any instrument or writing is required to be signed by any person, it is not necessary that he or she should sign it with his or her own hand, but it is sufficient if his or her signature is written thereon by some other person by or under his or her authority.

Where a corporation makes any instrument or writing required by this Act to be signed, it is sufficient if the instrument or writing is sealed with the corporate seal.

Nothing in this section shall be construed as requiring the bill or note of a corporation to be under seal.

Where by this Act the time limited for doing any act or thing is less than 3 days, in reckoning time non-business days are excluded.

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 to take effect from the date of the noting.

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 presence of 2 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 2 may be used with necessary modifications, and if used shall be sufficient.

Every bill of exchange or promissory note drawn and purporting to be payable at sight or on presentation shall be stamped as and shall for all purposes be deemed to be a bill of exchange or promissory note payable on demand without any days of grace, any law or custom to the contrary notwithstanding.

Section 70 applies to a negotiable instrument that is not a bill in the same way as it applies to a bill.

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.

Nothing in this Act shall affect—