ACCEPTANCE. This word is commonly used as meaning a bill of exchange, that is, the actual bill itself, but an acceptance is really the writing across the face of a bill by which the drawee agrees to the order of the drawer. The drawee is the person to whom a bill is addressed by the drawer, and who is required 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. If the drawee agrees to the drawer's order he signifies his assent by accepting the bill. When the drawee has accepted a bill he is called the acceptor.

An acceptance is defined by Section 17 of the Bills of Exchange Act, 1882, as follows : " (1) The acceptance of a bill is the signi fication by the drawee of his assent to the order of the drawer.

" (2) An acceptance is invalid unless it complies with the following con ditions, 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." As a rule a drawee accepts a bill after it has been fully completed and signed by the drawer ; but by Section IS, " A bill may be accepted : " (I) Before it has been signed by the drawer, or while otherwise incom plete : " (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." There are two kinds of acceptances : (1) General acceptance. (See ACCEPT ANCE, GENERAL.) (2) Qualified acceptance. (See ACCEPT ANCE, 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." (Section 19, s.s. 2.) An acceptance is usually upon the face of the bill, but the drawee's signature placed upon the back of it is regarded as sufficient.

In such a case it is usual to make a reference on the front of the bill to the fact that the acceptance is on the back. A drawee may accept a bill by merely writing his name across it, without any further words, but it is customary for the word " accepted " to be used. When the bill is domiciled, .the name of the bank where it is payable follows the word " accepted," and then the acceptor signs his name. The commonest form of acceptance (a general acceptance) is :- " Accepted. payable at the X & V Bank ing Coy., Ltd., London, John Brown." If the bill is payable at so many days after sight, the drawee must add the date of sight ing to his acceptance. (See SIGHTING A BILL.) If there are several drawees named on a bill, each one of them must sign the accept ance, but an order addressed to two drawees in the alternative, or to two or more drawees in succession, is not a bill of exchange. (See DRAWEE.) Section 17 states that the acceptance must be signed by the drawee, but anyone who holds a proper authority from the drawee to accept bills may accept on his behalf.

Where the drawee is a firm, the partner who accepts must do so in the name of the firm. If the drawee is Mrs. John Brown, she should accept as " Mary Brown, wife (or widow) of John Brown." Where the drawee is a limited company, the acceptance should, to be correct, contain the name of the company as well as the signatures of the authorised officials.

With regard to the rules as to presentment of a bill for acceptance, see PRESENTMENT FOR ACCEPTANCE.

When a bill is duly presented for accept ance and is not accepted within the cus tomary time, the person presenting it must treat it as dishonoured by non-acceptance.

Resources

Top Categories

Product

Company