Convention on International Bills of Exchange and International Promissory Notes in United States

Convention on International Bills of Exchange and International Promissory Notes

CHAPTER I. SPHERE OF APPLICATION AND FORM OF THE INSTRUMENT

Article 1

(1) This Convention applies to an international bill of exchange when
it contains the heading “International bill of exchange (UNCITRAL
Convention)” and also contains in its text the words “International bill
of exchange (UNCITRAL Convention)”.

(2) This Convention applies to an international promissory note when it
contains the heading “International promissory note (UNCITRAL
Convention)” and also contains in its text the words “International
promissory note (UNCITRAL Convention)”.

(3) This Convention does not apply to cheques.

Article 2

(1) An international bill of exchange is a bill of exchange which
specifies at least two of the following places and indicates that any two
so specified are situated in different States:

(a) The place where the bill is drawn;

(b) The place indicated next to the signature of the drawer;

(d) The place indicated next to the name of the payee;

(e) The place of payment:

provided that either the place where the bill is drawn or the place of
payment is specified on the bill and that such place is situated in a
Contracting State.

(2) An international promissory note is a promissory note which
specifies at least two of the following places and indicates that any two
so specified are situated in different States:

(a) The place where the note is made;

(b) The place indicated next to the signature of the maker;

(d) The place of payment:

provided that the place of payment is specified on the note and that such
place is situated in a Contracting State.

(3) This Convention does not deal with the question of sanctions that
may be imposed under national law in cases where an incorrect or false
statement has been made on an instrument in respect of a place referred
to in paragraph (1) or (2) of this article. However, any such sanctions
shall not affect the validity of the instrument or the application of
this Convention.

Article 3

(1) A bill of exchange is a written instrument which:

(a) Contains an unconditional order whereby the drawer directs the
drawee to pay a definite sum of money to the payee or to his order;

(b) Is payable on demand or at a definite time;

(d) Is signed by the drawer.

(2) A promissory note is a written instrument which:

(a) Contains an unconditional promise whereby the maker undertakes
to pay a definite sum of money to the payee or to his order;

(b) Is payable on demand or at a definite time;

(d) Is signed by the maker.

CHAPTER II. INTERPRETATION

Section 1. General Provisions

Article 4

In the interpretation of this Convention, regard is to be had to its
international character and to the need to promote uniformity in its
application and the observance of good faith in international
transactions.

Article 5

In this Convention:

(a) “Bill” means an international bill of exchange governed by this
Convention;

(b) “Note” means an international promissory note governed by this
Convention;

(d) “Drawee,, means a person on whom a bill is drawn and who has
not accepted it;

(e) “Payee” means a person in whose favour the drawer directs
payment to be made or to whom the maker promises to pay;

(f) “Holder” means a person in possession of an instrument in
accordance with article 15;

(g) “Protected holder” means a holder who meets the requirements of
article 29;

(h) “Guarantor” means any person who undertakes an obligation of
guarantee under article 46, whether governed by subparagraph (b)
(“guaranteed”) or subparagraph (c) (“aval”) of paragraph (4) of
article 47;

(i) “Party” means a person who has signed an instrument as drawer,
maker, acceptor, endorser or guarantor;

(j) “Maturity” means the time of payment referred to in paragraphs
(4), (5), (6) and (7) of article 9;

(k) “Signature” means a handwritten signature, its facsimile or an
equivalent authentication effected by any other means; “forged
signature” includes a signature by the wrongful use of such means;

(1) “Money” or “currency” includes a monetary unit of account which is
established by an intergovernmental institution or by agreement between
two or more States, provided that this Convention shall apply without
prejudice to the rules of the intergovernmental institution or to the
stipulations of the agreement.

Article 6

For the purposes of this Convention, a person is considered to have
knowledge of a fact if he has actual knowledge of that fact or could not
have been unaware of its existence.

Section 2. Interpretation of formal requirements

Article 7

The sum payable by an instrument is deemed to be a definite sum
although the instrument states that it is to be paid:

(a) With interest;

(b) By instalment at successive dates;

(c) By instalments at successive dates with a stipulation in the
instrument that upon default in payment of any instalment the
unpaid balance becomes due;

(d) According to a rate of exchange indicated in the instrument or
to be determined as directed by the instrument; or

(e) In a currency other than the currency in which the sum is
expressed in the instrument.

Article 8

(1) If there is a discrepancy between the sum expressed in words and
the sum expressed in figures, the sum payable by the instrument is the
sum expressed in words.

(2) If the sum is expressed more than once in words, and there is a
discrepancy, the sum payable is the smaller sum. The same rule applies
if the sum is expressed more than once in figures only, and there is a
discrepancy.

(3) If the sum is expressed in a currency having the same description
as that of at least one other State than the State where payment is to be
made, ar indicated in the instrument, and the specified currency is not
identified as the currency of any particular State, the currency is to be
considered as the currency of the State where payment is to be made.

(4) If an instrument states that the sum is to be paid with interest,
without specifying the date from which interest is to run, interest runs
from the date of the instrument.

(5) A stipulation stating that the sum is to be paid with interest is
deemed not to have been written on the instrument unless it indicates
the rate at which interest is to be paid.

(6) A rate at which interest is to be paid may be expressed either as a
definite rate or as a variable rate. For a variable rate to qualify for
this purpose, it must vary in relation to one or more reference rates of
interest in accordance with provisions stipulated in the instrument and
each such reference rate must be published or otherwise available to the
public and not be subject, directly or indirectly, to unilateral
determination by a person who is named in the instrument at the time the
bill is drawn or the note is made, unless the person is named only in the
reference rate provisions.

(7) If the rate at which interest is to be paid is expressed as a
variable rate, it may be stipulated expressly in the instrument that such
rate shall not be less than or exceed a specified rate of interest, or
that the variations are otherwise limited.

(8) If a variable rate does not qualify under paragraph (6) of this
article or for any reason it is not possible to determine the numerical
value of the variable rate for any period, interest shall be payable for
the relevant period at the rate calculated in accordance with paragraph
(2) of article 70.

Article 9

(1) An instrument is deemed to be payable on demand:

(a) If it states that it is payable at sight or on demand or on
presentment or if it contains words of similar import; or

(b) If no time of payment is expressed.

(2) An instrument payable at a definite time which is accepted or
endorsed or guaranteed after maturity is an instrument payable on demand
as regards the acceptor, the endorser or the guarantor.

(3) An instrument is deemed to be payable at a definite time if it
states that it is payable:

(a) On a stated date or at a fixed period after a stated date or at
a fixed period after the date of the instrument; or

(b) At a fixed period after sight; or

(d) By instalments at successive dates with the stipulation in the
instrument that upon default in payment of any instalment the
unpaid balance becomes due.

(4) The time of payment of an instrument payable at a fixed period
after date is determined by reference to the date of the instrument.

(5) The time of payment of a bill payable at a fixed period after sight
is determined by the date of acceptance or, if the bill is dishonoured by
non-acceptance, by the date of protest or, if protest is dispensed with,
by the date of dishonour.

(6) The time of payment of an instrument payable on demand is the date
on which the instrument is presented for payment.

(7) The time of payment of a note payable at a fixed period after sight
is determined by the date of the visa signed by the maker on the note or,
if his visa is refused, by the date of presentment.

(8) If an instrument is drawn, or made, payable one or more months
after a stated date or after the date of the instrument or after sight,
the instrument is payable on the corresponding date of the month when
payment must be made.

If there is no corresponding date, the instrument is payable on the last
day of that month.

Article 10

(1) A bill may be drawn:

(a) By two or more drawers;

(b) Payable to two or more payees.

(2) A note may be made:

(a) By two or more makers;

(b) Payable to two or more payees.

(3) If an instrument is payable to two or more payees in the
alternative, it is payable to any one of them and any one of them in
possession of the instrument may exercise the rights of a holder. In any
other case the instrument is payable to all of them and the rights of a
holder may be exercised only by all of them.

Article 11

A bill may be drawn by the drawer:

(a) On himself;

(b) Payable to his order.

Section 3. Completion of an incomplete instrument

Article 12

(1) An incomplete instrument which satisfies the requirements set out
in paragraph (1) of article 1 and bears the signature of the drawer or
the acceptance of the drawee, or which satisfies the requirements set out
in paragraph (2) of article 1 and subparagraph (d) of paragraph (2) of
article 3, but which lacks other elements pertaining to one or more of
the requirements set out in articles 2 and 3, may be completed, and the
instrument so completed is effective as a bill or a note.

(2) If such an instrument is completed without authority or otherwise
than in accordance with the authority given:

(a) A party who signed the instrument before the completion may
invoke such lack of authority as a defence against a holder who had
knowledge of such lack of authority when he became a holder;

(b) A party who signed the instrument after the completion is
liable according to the terms of the instrument so completed.

CHAPTER III. TRANSFER

Article 13

An instrument is transferred:

(a) By endorsement and delivery of the instrument by the endorser
to the endorsee; or

(b) By mere delivery of the instrument if the last endorsement is
in blank.
Article 14

(1) An endorsement must be written on the instrument or on a slip
affixed thereto (“allonge”). It must be signed.

(2) An endorsement may be:

(a) In blank, that is, by a signature alone or by a signature
accompanied by a statement to the effect that the instrument is
payable to a person in possession of it;

(b) Special, that is, by a signature accompanied by an indication
of the person to whom the instrument is payable.

(3) A signature alone, other than that of the drawee, is an endorsement
only if placed on the back of the instrument.

Article 15

(1) A person is a holder if he is:

(a) The payee in possession of the instrument; or

(b) In possession of an instrument which has been endorsed to him,
or on which the last endorsement is in blank, and on which there
appears an uninterrupted series of endorsements, even if any
endorsement was forged or was signed by an agent without authority.

(2) If an endorsement in blank is followed by another endorsement, the
person who signed this last endorsement is deemed to be an endorsee by
the endorsement in blank.

(3) A person is not prevented from being a holder by the fact that the
instrument was obtained by him or any previous holder under
circumstances, including incapacity or fraud, duress or mistake of any
kind, that would give rise to a claim to, or a defence against liability
on, the instrument.

Article 16

The holder of an instrument on which the last endorsement is in blank
may:

(a) Further endorse it either by an endorsement in blank or by a
special endorsement; or

(b) Convert the blank endorsement into a special endorsement by
indicating in the endorsement that the instrument is payable to
himself or to some other specified person; or

Article 17

(1) If the drawer or the maker has inserted in the instrument such
words as “not negotiable”, “not transferable”, “not to order”, “pay (X)
only”, or words of similar import, the instrument may not be transferred
except for purposes of collection, and any endorsement, even if it does
not contain words authorizing the endorsee to collect the instrument, is
deemed to be an endorsement for collection.

(2) If an endorsement contains the words “not negotiable”, “not
transferable”, “not to order”, “pay (X) only”, or words of similar
import, the instrument may not be transferred further except for purposes
of collection, and any subsequent endorsement, even if it does not
contain words authorizing the endorsee to collect the instrument, is
deemed to be an endorsement for collection.

Article 18

(1) An endorsement must be unconditional.

(2) A conditional endorsement transfers the instrument whether or not
the condition is fulfilled. The condition is ineffective as to those
parties and transferees who are subsequent to the endorsee.

Article 19

An endorsement in respect of a part of the sum due under the instrument
is ineffective as an endorsement.

Article 20

If there are two or more endorsements, it is presumed, unless the
contrary is proved, that each endorsement was made in the order in which
it appears on the instrument.

Article 21

(1) If an endorsement contains the words “for collection”, “for
deposit”, “value in collection”, “by procuration”, “pay any bank”, or
words of similar import authorizing the endorsee to collect the
instrument, the endorsee is a holder who:

(a) May exercise all rights arising out of the instrument;

(b) may endorse the instrument only for purposes of collection;

(2) The endorser for collection is not liable on the instrument to any
subsequent holder.

Article 22

(1) If an endorsement contains the words “value in security”, “value in
pledge”, or any other words indicating a pledge, the endorsee is a holder
who:

(a) May exercise all rights arising out of the instrument;

(b) May endorse the instrument only for purposes of collection;
(c) Is subject only to the claims and defences specified in article
28 or 30.

(2) If such an endorsee endorses for collection, he is not liable on
the instrument to any subsequent holder.

Article 23

The holder of an instrument may transfer it to a prior party or to the
drawee in accordance with article 13; however, if the transferee has
previously been a holder of the instrument, no endorsement is required,
and any endorsement which would prevent him from qualifying as a holder
may be struck out.

Article 24

An instrument may be transferred in accordance with article 13 after
maturity, except by the drawee, the acceptor or the maker.

Article 25

(1) If an endorsement is forged, the person whose endorsement is
forged, or a party who signed the instrument before the forgery, has the
right to recover compensation for any damage that he may have suffered
because of the forgery against:

(a) The forger;

(b) The person to whom the instrument was directly transferred by
the forger;

(c) A party or the drawee who paid the instrument to the forger
directly or through one or more endorsees for collection.

(2) However, an endorsee for collection is not liable under paragraph
(1) of this article if he is without knowledge of the forgery:

(a) At the time he pays the principal or advises him of the receipt
of payment, or

(b) At the time he receives payment, if this is later, unless his
lack of knowledge is due to his failure to act in good faith or to
exercise reasonable care.

(3) Furthermore, a party or the drawee who pays an instrument is not
liable under paragraph (1) of this article if, at the time he pays the
instrument, he is without knowledge of the forgery, unless his lack of
knowledge is due to his failure to act in good faith or to exercise
reasonable care.

(4) Except as against the forger, the damages recoverable under
paragraph (1) of this article may not exceed the amount referred to in
article 70 or 71.

Article 26

(1) If an endorsement is made by an agent without authority or power to
bind his principal in the matter, the principal, or a party who signed
the instrument before such endorsement, has the right to recover
compensation for any damage that he may have suffered because of such
endorsement against:

(a) The agent;

(b) The person to whom the instrument was directly transferred by
the agent;

(2) However, an endorsee for collection is not liable under paragraph
(1) of this article if he is without knowledge that the endorsement does
not bind the principal:

(a) At the time he pays the principal or advises him of the receipt
of payment, or

(b) At the time he receives payment, if this is later, unless his
lack of knowledge is due to his failure to act in good faith or to
exercise reasonable care.

(3) Furthermore, a party or the drawee who pays an instrument is not
liable under paragraph (1) of this article if, at the time he pays the
instrument, he is without knowledge that the endorsement does not bind
the principal, unless his lack of knowledge is due to his failure to act
in good faith or to exercise reasonable care.

(4) Except as against the agent, the damages recoverable under
paragraph (1) of this article may not exceed the amount referred to in
article 70 or 71.

CHAPTER IV. RIGHTS AND LIABILITIES

Section 1. The rights of a holder and of a protected holder

Article 27

(1) The holder of an instrument has all the rights conferred on him by
this Convention against the parties to the instrument.

(2) The holder may transfer the instrument in accordance with article
13.

Article 28

(1) A party may set up against a holder who is not a protected holder:

(a) Any defence that may be set up against a protected holder in
accordance with paragraph (1) of article 30;

(b) Any defence based on the underlying transaction between himself
and the drawer or between himself and his transferee, but only if
the holder took the instrument with knowledge of such defence or if
he obtained the instrument by fraud or theft or participated at any
time in a fraud or theft concerning it;

(c) Any defence arising from the circumstances as a result of which
he became a party, but only if the holder took the instrument with
knowledge of such defence or if he obtained the instrument by fraud
or theft or participated at any time in a fraud or theft concerning
it;

(d) Any defence which may be raised against an action in contract
between himself and the holder;

(e) Any other defence available under this Convention.

(2) The rights to an instrument of a holder who is not a protected
holder are subject to any valid claim to the instrument on the part of
any person, but only if he took the instrument with knowledge of such
claim or if he obtained the instrument by fraud or theft or participated
at any time in a fraud or theft concerning it.

(3) A holder who takes an instrument after the expiration of the
time-limit for presentment for payment is subject to any claim to, or
defence against liability on, the instrument to which his transferor is
subject.

(4) A party may not raise as a defence against a holder who is not a
protected holder the fact that a third person has a claim to the
instrument unless:

(a) The third person asserted a valid claim to the instrument; or

(b) The holder acquired the instrument by theft or forged the
signature of the payee or an endorsee, or participated in the theft
or the forgery.

Article 29

“Protected holder” means the holder of an instrument which was complete
when he took it or which was incomplete within the meaning of paragraph
(1) of article 12 and was completed in accordance with authority given,
provided that when he became a holder:

(a) He was without knowledge of a defence against liability on the
instrument referred to in subparagraphs (a), (b), (c) and (e) of
paragraph (1) of article 28;

(b) He was without knowledge of a valid claim to the instrument of
any person;

(d) The time-limit provided by article 55 for presentment of that
instrument for payment had not expired; and

(e) He did not obtain the instrument by fraud or theft or
participate in a fraud or theft concerning it.

Article 30

(1) A party may not set up against a protected holder any defence
except:

(a) Defences under articles 33 (1), 34, 35 (1), 36 (3), 53 (1), 57
(1), 63 (1) and 84 of this Convention;

(b) Defences based on the underlying transaction between himself
and such holder or arising from any fraudulent act on the part of
such holder in obtaining the signature on the instrument of that
party;

(c) Defences based on his incapacity to incur liability on the
instrument or on the fact that he signed without knowledge that his
signature made him a party to the instrument, provided that his
lack of knowledge was not due to his negligence and provided that
he was fraudulently induced so to sign.

(2) The rights to an instrument of a protected holder are not subject
to any claim to the instrument on the part of any person, except a valid
claim arising from the underlying transaction between himself and the
person by whom the claim is raised.

Article 31

(1) The transfer of an instrument by a protected holder vests in any
subsequent holder the rights to and on the instrument which the protected
holder had.

(2) Those rights are not vested in a subsequent holder if:

(a) He participated in a transaction which gives rise to a claim
to, or a defence against liability on, the instrument;

(b) He has previously been a holder, but not a protected holder.

Article 32

Every holder is presumed to be a protected holder unless the contrary
is proved.

Section 2. Liabilities of the parties

A. General provisions

Article 33

(1) Subject to the provisions of articles 34 and 36, a person is not
liable on an instrument unless he signs it.

(2) A person who signs an instrument in a name which is not his own is
liable as if he had signed it in his own name.

Article 34

A forged signature on an instrument does not impose any liability on
the person whose signature was forged. However, if he consents to be
bound by the forged signature or represents that it is his own, he is
liable as if he had signed the instrument himself.

Article 35

(1) If an instrument is materially altered:

(a) A party who signs it after the material alteration is liable
according to the terms of the altered text;

(b) A party who signs it before the material alteration is liable
according to the terms of the original text. However, if a party
makes, authorizes or assents to a material alteration, he is liable
according to the terms of the altered text.

(2) A signature is presumed to have been placed on the instrument after
the material alteration unless the contrary is proved.

(3) Any alteration is material which modifies the written undertaking
on the instrument of any party in any respect.

Article 36

(1) An instrument may be signed by an agent.

(2) The signature of an agent placed by him on an instrument with the
authority of his principal and showing on the instrument that he is
signing in a representative capacity for that named principal, or the
signature of a principal placed on the instrument by an agent with his
authority, imposes liability on the principal and not on the agent.

(3) A signature placed on an instrument by a person as agent but who
lacks authority to sign or exceeds his authority, or by an agent who has
authority to sign but who does not show on the instrument that he is
signing in a representative capacity for a named person, or who shows on
the instrument that he is signing in a representative capacity but does
not name the person whom he represents, imposes liability on the person
signing and not on the person whom he purports to represent.

(4) The question whether a signature was placed on the instrument in a
representative capacity may be determined only by reference to what
appears on the instrument.

(5) A person who is liable pursuant to paragraph (3) of this article
and who pays the instrument has the same rights as the person for whom he
purported to act would have had if that person had paid the instrument.

Article 37

The order to pay contained in a bill does not of itself operate as an
assignment to the payee of funds made available for payment by the drawer
with the drawee.

B. The drawer

Article 38

(1) The drawer engages that upon dishonour of the bill by
non-acceptance or by non-payment, and upon any necessary protest, he will
pay the bill to the holder, or to any endorser or any endorser’s
guarantor who takes up and pays the bill.

(2) The drawer may exclude or limit his own liability for acceptance or
for payment by an express stipulation in the bill. Such a stipulation is
effective only with respect to the drawer. A stipulation excluding or
limiting liability for payment is effective only if another party is or
becomes liable on the bill.

C. The maker

Article 39

(1) The maker engages that he will pay the note in accordance with its
terms to the holder, or to any party who takes up and pays the note.

(2) The maker may not exclude or limit his own liability by a
stipulation in the note. Any such stipulation is ineffective.

D. The drawee and the acceptor

Article 40

(1) The drawee is not liable on a bill until he accepts it.

(2) The acceptor engages that he will pay the bill in accordance with
the terms of his acceptance to the holder, or to any party who takes up
and pays the bill.

Article 41
(1) An acceptance must be written on the bill and may be effected:

(a) By the signature of the drawee accompanied by the word
“accepted” or by words of similar import; or

(b) By the signature alone of the drawee.

(2) An acceptance may be written on the front or on the back of the
bill.

Article 42

(1) An incomplete bill which satisfies the requirements set out in
paragraph (1) of article 1 may be accepted by the drawee before it has
been signed by the drawer, or while otherwise incomplete.

(2) A bill may be accepted before, at or after maturity, or after it
has been dishonoured by non-acceptance or by non-payment.

(3) If a bill drawn payable at a fixed period after sight, or a bill
which must be presented for acceptance before a specified date, is
accepted, the acceptor must indicate the date of his acceptance; failing
such indication by the acceptor, the drawer or the holder may insert the
date of acceptance.

(4) If a bill drawn payable at a fixed period after sight is
dishonoured by non-acceptance and the drawee subsequently accepts it, the
holder is entitled to have the acceptance dated as of the date on which
the bill was dishonoured.

Article 43

(1) An acceptance must be unqualified. An acceptance is qualified if
it is conditional or varies the terms of the bill.

(2) If the drawee stipulates in the bill that his acceptance is subject
to qualification:

(a) He is nevertheless bound according to the terms of his
qualified acceptance;

(b) The bill is dishonoured by non-acceptance.

(3) An acceptance relating to only a part of the sum payable is a
qualified acceptance. If the holder takes such an acceptance, the bill
is dishonoured by non-acceptance only as to the remaining part.

(4) An acceptance indicating that payment will be made at a particular
address or by a particular agent is not a qualified acceptance, provided
that:

(a) The place in which payment is to be made is not changed;

(b) The bill is not drawn payable by another agent.

E. The endorser

Article 44

(1) The endorser engages that upon dishonour of the instrument by
non-acceptance or by non-payment, and upon any necessary protest, he will
pay the instrument to the holder, or to any subsequent endorser or any
endorser’s guarantor who takes up and pays the instrument.

(2) An endorser may exclude or limit his own liability by an express
stipulation in the instrument. Such a stipulation is effective only with
respect to that endorser.

F. The transferor by endorsement or by mere delivery

Article 45

(1) Unless otherwise agreed, a person who transfers an instrument, by
endorsement and delivery or by mere delivery, represents to the holder to
whom he transfers the instrument that:

(a) The instrument does not bear any forged or unauthorized
signature;

(b) The instrument has not been materially altered;

(c) At the time of transfer, he has no knowledge of any fact which
would impair the right of the transferee to payment of the
instrument against the acceptor of a bill or, in the case of an
unaccepted bill, the drawer, or against the maker of a note.

(2) Liability of the transferor under paragraph (1) of this article is
incurred only if the transferee took the instrument without knowledge of
the matter giving rise to such liability.

(3) If the transferor is liable under paragraph (1) of this article,
the transferee may recover, even before maturity, the amount paid by him
to the transferor, with interest calculated in accordance with article
70, against return of the instrument.

G. The guarantor

Article 46

(1) Payment of an instrument, whether or not it has been accepted, may
be guaranteed, as to the whole or part of its amount, for the account of
a party or the drawee. A guarantee may be given by any person, who may
or may not already be a party.

(2) A guarantee must be written on the instrument or on a slip affixed
thereto (“allonge”).

(3) A guarantee is expressed by the words “guaranteed”, “aval”, “good
as aval” or words of similar import, accompanied by the signature of the
guarantor. For the purposes of this Convention, the words “prior
endorsements guaranteed” or words of similar import do not consttute a
guarantee.

(4) A guarantee may be effected by a signature alone on the front of
the instrument. A signature alone on the front of the instrument, other
than that of the maker, the drawer or the drawee, is a guarantee.

(5) A guarantor may specify the person for whom he has become
guarantor. In the absence of such specification, the person for whom he
has become guarantor is the acceptor or the drawee in the case of a bill,
and the maker in the case of a note.

(6) A guarantor may not raise as a defence to his liability the fact
that he signed the instrument before it was signed by the person for whom
he is a guarantor, or while the instrument was incomplete.

Article 47

(1) The liability of a guarantor on the instrument is of the same
nature as that of the party for whom he has become guarantor.

(2) If the person for whom he has become guarantor is the drawee, the
guarantor engages:

(a) To pay the bill at maturity to the holder, or to any party who
takes up and pays the bill;

(b) If the bill is payable at a definite time, upon dishonour by
non-acceptance and upon any necessary protest, to pay it to the
holder, or to any party who takes up and pays the bill.

(3) In respect of defences that are personal to himself, a guarantor
may set up:

(a) Against a holder who is not a protected holder only those
defences which he may set up under paragraphs (1), (3) and (4) of
article 28;

(b) Against a protected holder only those defences which he may set
up under paragraph (1) of article 30.

(4) In respect of defences that may be raised by the person for whom he
has become a guarantor:

(a) A guarantor may set up against a holder who is not a protected
holder only those defences which the person for whom he has become
a guarantor may set up against such holder under paragraphs (1),
(3) and (4) of article 28;

(b) A guarantor who expresses his guarantee by the words
“guaranteed”, “payment guaranteed” or “collection guaranteed”, or
words of similar import, may set up against a protected holder only
those defences which the person for whom he has become a guarantor
may set up against a protected holder under paragraph (1) of
article 30;

(c) A guarantor who expresses his guarantee by the words “aval” or
“good as aval” may set up against a protected holder only:

(i) The defence, under subparagraph (b) of paragraph (1) of
article 30, that the protected holder obtained the signature
on the instrument of the person for whom he has become a
guarantor by a fraudulent act;

(ii) The defence, under article 53 or 57, that the instrument was
not presented for acceptance or for payment;

(iii) The defence, under article 63, that the instrument was not
duly protested for non-acceptance or for non-payment;

(iv) The defence, under article 84, that a right of action may no
longer be exercised against the person for whom he has become
guarantor;

(d) A guarantor who is not a bank or other financial institution
and who expresses his guarantee by a signature alone may set up
against a protected holder only the defences referred to in
subparagraph (b) of this paragraph;

(e) A guarantor which is a bank or other financial institution and
which expresses its guarantee by a signature alone may set up
against a protected holder only the defences referred to in
subparagraph (c) of this paragraph.

Article 48

(1) Payment of an instrument by the guarantor in accordance, with
article 72 discharges the party for whom he became guarantor of his
liability on the instrument to the extent of the amount paid.

(2) The guarantor who pays the instrument may recover from the party
for whom he has become guarantor and from the parties who are liable on
it to that party the amount paid and any interest.

CHAPTER V. PRESENTMENT, DISHONOUR BY NON-ACCEPTANCE OR NON-PAYMENT,
AND RECOURSE

Section 1. Presentment for acceptance and dishonour by non-acceptance

Article 49

(1) A bill may be presented for acceptance.

(2) A bill must be presented for acceptance:

(a) If the drawer has stipulated in the bill that it must be
presented for acceptance;

(b) If the bill is payable at a fixed period after sight; or

(c) If the bill is payable elsewhere than at the residence or place
of business of the drawee, unless it is payable on demand.

Article 50

(1) The drawer may stipulate in the bill that it must not be presented
for acceptance before a specified date or before the occurrence of a
specified event. Except where a bill must be presented for acceptance
under subparagraph (b) or (c) of paragraph (2) of article 49, the drawer
may stipulate that it must not be presented for acceptance.

(2) If a bill is presented for acceptance notwithstanding a stipulation
permitted under paragraph (1) of this article and acceptance is refused,
the bill is not thereby dishonoured.

(3) If the drawee accepts a bill notwithstanding a stipulation that it
must not be presented for acceptance, the acceptance is effective.

Article 51

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

(a) The holder must present the bill to the drawee on a business
day at a reasonable hour;

(b) Presentment for acceptance may be made to a person or authority
other than the drawee if that person or authority is entitled under
the applicable law to accept the bill;

(d) A bill payable on demand or at a fixed period after sight must
be presented for acceptance within one year of its date;

(e) A bill in which the drawer has stated a date or time-limit for
presentment for acceptance must be presented on the stated date or
within the stated time-limit.

Article 52

(1) A necessary or optional presentment for acceptance is dispensed
with if:

(a) The drawee is dead, or no longer has the power freely to deal
with his assets by reason of his insolvency, or is a fictitious
person, or is a person not having capacity to incur liability on
the instrument as an acceptor; or

(b) The drawee is a corporation, partnership, association or other
legal entity which has ceased to exist.

(2) A necessary presentment for acceptance is dispensed with if:

(a) A bill is payable on a fixed date, and presentment for
acceptance cannot be effected before or on that date due to
circumstances which are beyond the control of the holder and which
he could neither avoid nor overcome; or

(b) A bill is payable at a fixed period after sight, and
presentment for acceptance cannot be effected within one year of
its date due to circumstances which are beyond the control of the
holder and which he could neither avoid nor overcome.

(3) Subject to paragraphs (1) and (2) of this article, delay in a
necessary presentment for acceptance is excused, but presentment for
acceptance is not dispensed with, if the bill is drawn with a stipulation
that it must be presented for acceptance within a stated time-limit, and
the delay in presentment for acceptance is caused by circumstances which
are beyond the control of the holder and which he could neither avoid nor
overcome. When the cause of the delay ceases to operate, presentment
must be made with reasonable diligence.

Article 53

(1) If a bill which must be presented for acceptance is not so
presented, the drawer, the endorsers and their guarantors are not liable
on the bill.

(2) Failure to present a bill for acceptance does not discharge the
guarantor of the drawee of liability on the bill.

Article 54

(1) A bill is considered to be dishonoured by non-acceptance:

(a) If the drawee, upon due presentment, expressly refuses to
accept the bill or acceptance cannot be obtained with reasonable
diligence or if the holder cannot obtain the acceptance to which he
is entitled under this Convention;

(b) If presentment for acceptance is dispensed with pursuant to
article 52, unless the bill is in fact accepted.

(2) (a) If a bill is dishonoured by non-acceptance in accordance with
subparagraph (a) of paragraph (1) of this article, the holder may
exercise an immediate right of recourse against the drawer, the endorsers
and their guarantors, subject to the provisions of article 59.

(b) If a bill is dishonoured by non-acceptance in accordance with
subparagraph (b) of paragraph (1) of this article, the holder may
exercise an immediate right of recourse against the drawer, the
endorsers and their guarantors.

(c) If a bill is dishonoured by non-acceptance in accordance with
paragraph (1) of this article, the holder may claim payment from
the guarantor of the drawee upon any necessary protest.

(3) If a bill payable on demand is presented for acceptance, but
acceptance is refused, it is not considered to be dishonoured by
non-acceptance.

Section 2. Presentment for payment and dishonour by non-payment

Article 55

An instrument is duly presented for payment if it is presented in
accordance with the following rules:

(a) The holder must present the instrument to the drawee or to the
acceptor or to the maker on a business day at a reasonable hour;

(b) A note signed by two or more makers may be presented to any one
of them, unless the note clearly indicates otherwise;

(c) If the drawee or the acceptor or the maker is dead, presentment
must be made to the persons who under the applicable law are his
heirs or the persons entitled to administer his estate;

(d) Presentment for payment may be made to a person or authority
other than the drawee, the acceptor or the maker if that person or
authority is entitled under the applicable law to pay the
instrument;

(e) An instrument which is not payable on demand must be presented
for payment on the date of maturity or on one of the two business
days which follow;

(f) An instrument which is payable on demand must be presented for
payment within one year of its date;

(g) An instrument must be presented for payment:

(i) At the place of payment specified on the instrument; or

(ii) If no place of payment is specified, at the address of the
drawee or the acceptor or the maker indicated in the
instrument; or

(iii) If no place of payment is specified and the address of the
drawee or the acceptor or the maker is not indicated, at the
principal place of business or habitual residence of the
drawee or the acceptor or the maker;

(h) An instrument which is presented at a clearing-house is duly
presented for payment if the law of the place where the
clearing-house is located or the rules or customs of that
clearing-house so provide.

Article 56

(1) Delay in making presentment for payment is excused if the delay is
caused by circumstances which are beyond the control of the holder and
which he could neither avoid nor overcome. When the cause of the delay
ceases to operate, presentment must be made with reasonable diligence.

(2) Presentment for payment is dispensed with:

(a) If the drawer, an endorser or a guarantor has expressly waived
presentment; such waiver:

(i) If made on the instrument by the drawer, binds any subsequent
party and benefits any holder;

(ii) If made on the instrument by a party other than the drawer,
binds only that party but benefits any holder;

(iii) If made outside the instrument, binds only the party making
it and benefits only a holder in whose favour it was made;

(b) If an instrument is not payable on demand, and the cause of
delay in making presentment referred to in paragraph (1) of this
article continues to operate beyond 30 days after maturity;

(c) If an instrument is payable on demand, and the cause of delay
in making presentment referred to in paragraph (1) of this article
continues to operate beyond 30 days after the expiration of the
time-limit for presentment for payment;

(d) If the drawee, the maker or the acceptor has no longer the
power freely to deal with his assets by reason of his insolvency,
or is a fictitious person or a person not having capacity to make
payment, or if the drawee, the maker or the acceptor is a
corporation, partnership, association or other legal entity which
has ceased to exist;

(e) If there is no place at which the instrument must be presented
in accordance with subparagraph (g) of article 55.

(3) Presentment for payment is also dispensed with as regards a bill,
if the bill has been protested for dishonour by non-acceptance.

Article 57

(1) If an instrument is not duly presented for payment, the drawer, the
endorsers and their guarantors are not liable on it.

(2) Failure to present an instrument for payment does not discharge the
acceptor, the maker and their guarantors or the guarantor of the drawee
of liability on it.

Article 58

(1) An instrument is considered to be dishonoured by non-payment:

(a) If payment is refused upon due presentment or if the holder
cannot obtain the payment to which he is entitled under this
Convention;

(b) If presentment for payment is dispensed with pursuant to
paragraph (2) of article 56 and the instrument is unpaid at
maturity.

(2) If a bill is dishonoured by non-payment, the holder may, subject to
the provisions of article 59, exercise a right of recourse against the
drawer, the endorsers and their guarantors.

(3) If a note is dishonoured by non-payment, the holder may, subject to
the provisions of article 59, exercise a right of recourse against the
endorsers and their guarantors.

Section 3. Recourse

Article 59

If an instrument is dishonoured by non-acceptance or by non-payment,
the holder may exercise a right of recourse only after the instrument has
been duly protested for dishonour in accordance with the provisions of
articles 60 to 62.

A. Protest

Article 60

(1) A protest is a statement of dishonour drawn up at the place where
the instrument has been dishonoured and signed and dated by a person
authorized in that respect by the law of that place. The statement must
specify:

(a) The person at whose request the instrument is protested;

(b) The place of protest; and

(c) The demand made and the answer given, if any, or the fact that
the drawee or the acceptor or the maker could not be found.

(2) A protest may be made:

(a) On the instrument or on a slip affixed thereto (“allonge”); or

(b) As a separate document, in which case it must clearly identify
the instrument that has been dishonoured.

(3) Unless the instrument stipulates that protest must be made, a
protest may be replaced by a declaration written on the instrument and
signed and dated by the drawee or the acceptor or the maker, or, in the
case of an instrument domiciled with a named person for payment, by that
named person; the declaration must be to the effect that acceptance or
payment is refused.

(4) A declaration made in accordance with paragraph (3) of this article
is a protest for the purpose of this Convention.

Article 61

Protest for dishonour of an instrument by non-acceptance or by
non-payment must be made on the day on which the instrument is
dishonoured or on one of the four business days which follow.

Article 62

(1) Delay in protesting an instrument for dishonour is excused if the
delay is caused by circumstances which are beyond the control of the
holder and which he could neither avoid nor overcome. When the cause of
the delay ceases to operate, protest must be made with reasonable
diligence.

(2) Protest for dishonour by non-acceptance or by non-payment is
dispensed with:
(a) If the drawer, an endorser or a guarantor has expressly waived
protest; such waiver:

(i) If made on the instrument by the drawer, binds any subsequent
party and benefits any holder;

(ii) If made on the instrument by a party other than the drawer,
binds only that party but benefits-any holder;

(iii) If made outside the instrument, binds only the party making
it and benefits only a holder in whose favour it was made;

(b) If the cause of the delay in making protest referred to in
paragraph (1) of this article continues to operate beyond 30 days
after the date of dishonour;

(d) If presentment for acceptance or for payment is dispensed with
in accordance with article 52 or paragraph (2) of article 56.

Article 63

(1) If an instrument which must be protested for non-acceptance or for
non-payment is not duly protested, the drawer, the endorsers and their
guarantors are not liable on it.

(2) Failure to protest an instrument does not discharge the acceptor,
the maker and their guarantors or the guarantor of the drawee of
liability on it.

B. Notice of dishonour

Article 64

(1) The holder, upon dishonour of an instrument by non-acceptance or by
non-payment, must give notice of such dishonour:

(a) To the drawer and the last endorser, and

(b) To all other endorsers and guarantors whose addresses the
holder can ascertain on the basis of information contained in the
instrument.

(2) An endorser or a guarantor who receives notice must give notice of
dishonour to the last party preceding him and liable on the instrument.

(3) Notice of dishonour operates for the benefit of any party who has a
right of recourse on the instrument against the party notified.

Article 65

(1) Notice of dishonour may be given in any form whatever and in any
terms which identify the instrument and state that it has been
dishonoured. The return of the dishonoured instrument is sufficient
notice, provided it is accompanied by a statement indicating that it has
been dishonoured.

(2) Notice of dishonour is duly given if it is communicated or sent to
the party to be notified by means appropriate in the circumstances,
whether or not it is received by that party.

(3) The burden of proving that notice has been duly given rests upon
the person who is required to give such notice.

Article 66

Notice of dishonour must be given within the two business days which
follow:

(a) The day of protest or, if protest is dispensed with, the day of
dishonour; or

(b) The day of receipt of notice of dishonour.

Article 67

(1) Delay in giving notice of dishonour is excused if the delay is
caused by circumstances which are beyond the control of the person
required to give notice, and which he could neither avoid nor overcome.
When the cause of the delay ceases to operate, notice must be given with
reasonable diligence.

(2) Notice of dishonour is dispensed with:

(a) If, after the exercise of reasonable diligence, notice cannot
be given;

(b) If the drawer, an endorser or a guarantor has expressly waived
notice of dishonour; such waiver:

(i) If made on the instrument by the drawer, binds any subsequent
party and benefits any holder;

(ii) If made on the instrument by a party other than the drawer,
binds only that party but benefits any holder;

(iii) If made outside the instrument, binds only the party making
it and benefits only a holder in whose favour it was made;

Article 68

If a person who is required to give notice of dishonour fails to give
it to a party who is entitled to receive it, he is liable for any damages
which that party may suffer from such failure, provided that such damages
do not exceed the amount referred to in article 70 or 71.

Section 4. Amount payable

Article 69

(1) The holder may exercise his rights on the instrument against any
one party, or several or all parties, liable on it and is not obliged to
observe the order in which the parties have become bound. Any party who
takes up and pays the instrument may exercise his rights in the same
manner against parties liable to him.

(2) Proceedings against a party do not preclude proceedings against any
other party, whether or not subsequent to the party originally proceeded
against.

Article 70

(1) The holder may recover from any party liable:
(a) At maturity: the amount of the instrument with interest, if
interest has been stipulated for;

(b) After maturity:

(i) The amount of the instrument with interest, if interest has
been stipulated for, to the date of maturity;

(ii) If interest has been stipulated to be paid after maturity,
interest at the rate stipulated, or, in the absence of such
stipulation, interest at the rate specified in paragraph (2)
of this article, calculated from the date of presentment on
the sum specified in subparagraph (b) (i) of this paragraph;

(iii) Any expenses of protest and of the notices given by him;

(i) The amount of the instrument with interest, if interest has
been stipulated for, to the date of payment; or, if no
interest has been stipulated for, subject to a discount from
the date of payment to the date of maturity, calculated in
accordance with paragraph (4) of this article;

(ii) Any expenses of protest and of the notices given by him.

(2) The rate of interest shall be the rate that would be recoverable in
legal proceedings taken in the jurisdiction where the instrument is
payable.

(3) Nothing in paragraph (2) of this article prevents a court from
awarding damages or compensation for additional loss caused to the holder
by reason of delay in payment.

(4) The discount shall be at the official rate (discount rate) or other
similar appropriate rate effective on the date when recourse is exercised
at the place where the holder has his principal place of business, or, if
he does not have a place of business his habitual residence, or, if there
is no such rate, then at such rate as is reasonable in the circumstances.

Article 71

A party who pays an instrument and is thereby discharged in whole or in
part of his liability on the instrument may recover from the parties
liable to him:

(a) The entire sum which he has paid;

(b) Interest on that sum at the rate specified in paragraph (2) of
article 70, from the date on which he made payment;

CHAPTER VI. DISCHARGE

Section 1. Discharge by payment

Article 72

(1) A party is discharged of liability on the instrument when he pays
the holder, or a party subsequent to himself who has paid the instrument
and is in possession of it, the amount due pursuant to article 70 or 71:

(a) At or after maturity; or

(b) Before maturity, upon dishonour by non-acceptance.

(2) Payment before maturity other than under subparagraph (b) of
paragraph (1) of this article does not discharge the party making the
payment of his liability on the instrument except in respect of the
person to whom payment was made.

(3) A party is not discharged of liability if he pays a holder who is
not a protected holder, or a party who has taken up and paid the
instrument, and knows at the time of payment that the holder or that
party acquired the instrument by theft or forged the signature of the
payee or an endorsee, or participated in the theft or the forgery.

(4) (a) A person receiving payment of an instrument must, unless agreed
otherwise, deliver:

(i) To the drawee making such payment, the instrument;

(ii) To any other person making such payment, the instrument, a
receipted account, and any protest.

(b) In the case of an instrument payable by instalments at
successive dates, the drawee or a party making a payment, other
than payment of the last instalment, may require that mention of
such payment be made on the instrument or on a slip affixed thereto
(“allonge”) and that a receipt therefor be given to him.

(c) If an instrument payable by instalments at successive dates is
dishonoured by non-acceptance or by non-payment as to any of its
instalments and a party, upon dishonour, pays the instalment, the
holder who receives such payment must give the party a certified
copy of the instrument and any necessary authenticated protest in
order to enable such party to exercise a right on the instrument.

(d) The person from whom payment is demanded may withhold payment
if the person demanding payment does not deliver the instrument to
him. Withholding payment in these circumstances does not constitute
dishonour by non-payment under article 58.

(e) If payment is made but the person paying, other than the
drawee, fails to obtain the instrument, such person is discharged
but the discharge cannot be set up as a defence against a protected
holder to whom the instrument has been subsequently transferred.

Article 73

(1) The holder is not obliged to take partial payment.

(2) If the holder who is offered partial payment does not take it, the
instrument is dishonoured by non-payment.

(3) If the holder takes partial payment from the drawee, the guarantor
of the drawee, or the acceptor or the maker:

(a) The guarantor of the drawee, or the acceptor or the maker is
discharged of his liability on the instrument to the extent of the
amount paid; and

(b) The instrument is to be considered as dishonoured by
non-payment as to the amount unpaid.

(4) If the holder takes partial payment from a party to the instrument
other than the acceptor, the maker or the guarantor of the drawee:

(a) The party making payment is discharged of his liability on the
instrument to the extent of the amount paid; and

(b) The holder must give such party a certified copy of the
instrument and any necessary authenticated protest in order to
enable such party to exercise a right on the instrument.

(5) The drawee or a party making partial payment may require that
mention of such payment be made on the instrument and that a receipt
therefor be given to him.

(6) If the balance is paid, the person who receives it and who is in
possession of the instrument must deliver to the payor the receipted
instrument and any authenticated protest.

Article 74

(1) The holder may refuse to take payment at a place other than the
place where the instrument was presented for payment in accordance with
article 55.

(2) In such case if payment is not made at the place where the
instrument was presented for payment in accordance with article 55, the
instrument is considered to be dishonoured by non-payment.

Article 75

(1) An instrument must be paid in th currency in which the sum payable
is expressed.

(2) If the sum payable is expressed in a monetary unit of account
within the meaning of subparagraph (1) of article 5 and the monetary unit
of account is transferable between the person making payment and the
person receiving it, then, unless the instrument specifies a currency of
payment, payment shall be made by transfer of monetary units of account.
If the monetary unit of account is not transferable between those
persons, payment shall be made in the currency specified in the
instrument or, if no such currency is specified, in the currency of the
place of payment.

(3) The drawer or the maker may indicate in the instrument that it must
be paid in a specified currency other than the currency in which the sum
payable is expressed. In that case:

(a) The instrument must be paid in the currency so specified;

(b) The amount payable is to be calculated according to the rate of
exchange indicated in the instrument. Failing such indication, the
amount payable is to be calculated according to the rate of
exchange for sight drafts (or, if there is no such rate, according
to the appropriate established rate of exchange) on the date of
maturity:

(i) Ruling at the place where the instrument must be presented
for payment in accordance with subparagraph (g) of article
55, if the specified currency is that of that place (local
currency); or

(ii) If the specified currency is not that of that place,
according to the usages of the place where the instrument
must be presented for payment in accordance with subparagraph
(g) of article 55;

(i) If the rate of exchange is indicated in the instrument,
according to that rate;

(ii) If no rate of exchange is indicated in the instrument, at the
option of the holder, according to the rate of exchange
ruling on the date of dishonour or on the date of actual
payment;

(d) If such an instrument is dishonoured by non-payment, the amount
payable is to be calculated:

(i) If the rate of exchange is indicated in the instrument,
according to that rate;

(ii) If no rate of exchange is indicated in the instrument, at the
option of the holder, according to the rate of exchange
ruling on the date of maturity or on the date of actual
payment.

(4) Nothing in this article prevents a court from awarding damages for
loss caused to the holder by reason of fluctuations in rates of exchange
if such loss is caused by dishonour for non-acceptance or by non-payment.

(5) The rate of exchange ruling at a certain date is the rate of
exchange ruling, at the option of the holder, at the place where the
instrument must be presented for payment in accordance with subparagraph
(g) of article 55 or at the place of actual payment.

Article 76

(1) Nothing in this Convention prevents a Contracting State from
enforcing exchange control regulations applicable in its territory and
its provisions relating to the protection of its currency, including
regulations which it is bound to apply by virtue of international
agreements to which it is a party.

(2) (a) If, by virtue of the application of paragraph (1) of this
article, an instrument drawn in a currency which is not that of the place
of payment must be paid in local currency, the amount payable is to be
calculated according to the rate of exchange for sight drafts (or, if
there is no such rate, according to the appropriate established rate of
exchange) on the date of presentment ruling at the place where the
instrument must be presented for payment in accordance with subparagraph
(g) of article 55.

(b) (i) If such an instrument is dishonoured by non-acceptance,
the amount payable is to be calculated, at the option of the
holder, at the rate of exchange ruling on the date of
dishonour or on the date of actual payment.

(ii) If such an instrument is dishonoured by non-payment, the
amount is to be calculated, at the option of the holder,
according to the rate of exchange ruling on the date of
presentment or on the date of actual payment.

(iii) Paragraphs (4) and (5) of article 75 are applicable where
appropriate.

Section 2. Discharge of other parties

Article 77

(1) If a party is discharged in whole or in part of his liability on
the instrument, any party who has a right on the instrument against him
is discharged to the same extent.

(2) Payment by the drawee of the whole or a part of the amount of a
bill to the holder, or to any party who takes up and pays the bill,
discharges all parties of their liability to the same extent, except
where the drawee pays a holder who is not a protected holder, or a party
who has taken up and paid the bill, and knows at the time of payment that
the holder or that party acquired the bill by theft or forged the
signature of the payee or an endorsee, or participated in the theft or
the forgery.

CHAPTER VII. LOST INSTRUMENTS

Article 78

(1) If an instrument is lost, whether by destruction, theft or
otherwise, the person who lost the instrument has, subject to the
provisions of paragraph (2) of this article, the same right to payment
which he would have had if he had been in possession of the instrument.
The party from whom payment is claimed cannot set up as a defence against
liability on the instrument the fact that the person claiming payment is
not in possession of the instrument.

(2) (a) The person claiming payment of a lost instrument must state in
writing to the party from whom he claims payment:

(i) The elements of the lost instrument pertaining to the
requirements set forth in paragraph (1) or (2) of articles 1,
2 and 3; for this purpose the person claiming payment of the
lost instrument may present to that party a copy of that
instrument;

(ii) The facts showing that, if he had been in possession of the
instrument, he would have had a right to payment from the
party from whom payment is claimed;

(iii) The facts which prevent production of the instrument.

(b) The party from whom payment of a lost instrument is claimed may
require the person claiming payment to give security in order to
indemnify him for any loss which he may suffer by reason of the
subsequent payment of the lost instrument.

(c) The nature of the security and its terms are to be determined
by agreement between the person claiming payment and the party from
whom payment is claimed. Failing such an agreement, the court may
determine whether security is called for and, if so, the nature of
the security and its terms.

(d) If the security cannot be given, the court may order the party
from whom payment is claimed to deposit the sum of the lost
instrument, and any interest and expenses which may be claimed
under article 70 or 71, with the court or any other competent
authority or institution, and may determine the duration of such
deposit. Such deposit is to be considered as payment to the person
claiming payment.

Article 79

(1) A party who has paid a lost instrument and to whom the instrument
is subsequently presented for payment by another person must give notice
of such presentment to the person whom he paid.

(2) Such notice must be given on the day the instrument is presented or
on one of the two business days which follow and must state the name of
the person presenting the instrument and the date and place of
presentment.

(3) Failure to give notice renders the party who has paid the lost
instrument liable for any damages which the person whom he paid may
suffer from such failure, provided that the damages do not exceed the
amount referred to in article 70 or 71.

(4) Delay in gving notice is excused when the delay is caused by
circumstances which are beyond the control of the peson who has paid the
lost instrument and which he could neither avoid nor overcome. When the
cause of the delay ceases to operate, notice must be given with
reasonable diligence.

(5) Notice is dispensed with when the cause of delay in giving notice
continues to operate beyond 30 days after the last day on which it should
have been given.

Article 80

(1) A party who has paid a lost instrument in accordance with the
provisions of article 78 and who is subsequently required to, and does,
pay the instrument, or who, by reason of the loss of the instrument, then
loses his right to recover from any party liable to him, has the right:

(a) If security was given, to realize the security; or

(b) If an amount was deposited with the court or other competent
authority or institution, to reclaim the amount so deposited.

(2) The person who has given security in accordance with the provisions
of subparagraph (b) of paragraph (2) of article 78 is entitled to obtain
release of the security when the party for whose benefit the security was
given is no longer at risk to suffer loss because of the fact that the
instrument is lost.

Article 81

For the purpose of making protest for dishonour by non-payment, a
person claiming payment of a lost instrument may use a written statement
that satisfies the requirements of subparagraph (a) of paragraph (2) of
article 78.

Article 82

A person receiving payment of a lost instrument in accordance with
article 78 must deliver to the party paying the written statement
required under subparagraph (a) of paragraph (2) of article 78, receipted
by him, and any protest and a receipted account.

Article 83

(1) A party who pays a lost instrument in accordance with article 78
has the same rights which he would have had if he had been in possession
of the instrument.

(2) Such party may exercise his rights only if he is in possession of
the receipted written statement referred to in article 82.

CHAPTER VIII. LIMITATION (PRESCRIPTION)

Article 84

(1) A right of action arising on an instrument may no longer be
exercised after four years have elapsed:

(a) Against the maker, or his guarantor, of a note payable on
demand, from the date of the note;

(b) Against the acceptor or the maker or their guarantor of an
instrument payable at a definite time, from the date of maturity;

(c) Against the guarantor of the drawee of a bill payable at a
definite time, from the date of maturity or, if the bill is
dishonoured by non-acceptance, from the date of protest for
dishonour or, where protest is dispensed with, from the date of
dishonour;

(d) Against the acceptor of a bill payable on demand or his
guarantor, from the date on which it was accepted or, if no such
date is shown, from the date of the bill;

(e) Against the guarantor of the drawee of a bill payable on
demand, from the date on which he signed the bill or, if no such
date is shown, from the date of the bill;

(f) Against the drawer or an endorser or their guarantor, from the
date of protest for dishonour by non-acceptance or by non-payment
or, where protest is dispensed with, from the date of dishonour.

(2) A party who pays the instrument in accordance with article 70 or 71
may exercise his right of action against a party liable to him within one
year from the date on which he paid the instrument.

CHAPTER IX. FINAL PROVISIONS

Article 85

The Secretary-General of the United Nations is hereby designated as the
depositary for this Convention.

Article 86

(1) This Convention is open for signature by all States at the
Headquarters of the United Nations, New York until 30 June 1990.

(2) This Convention is subject to ratification, acceptance or approval
by the signatory States.

(3) This Convention is open for accession by all States which are not
signatory States as from the date it is open for signature.

(4) Instruments of ratification, acceptance, approval and accession are
to be deposited with the Secretary-General of the United Nations.

Article 87

(1) If a Contracting State has two or more territorial units in which,
according to its constitution, different systems of law are applicable in
relation to the matters dealt with in this Convention, it may, at the
time of signature, ratification, acceptance, approval or accession,
declare that this Convention is to extend to all its territorial units or
only to one or more of them, and may amend its declaration by submitting
another declaration at any time.

(2) These declarations are to be notified to the depositary and are to
state expressly the territorial units to which the Convention extends.

(3) If a Contracting State makes no declaration under paragraph (1) of
this article, the Convention is to extend to all territorial units of
that State.

Article 88

(1) Any State may declare at the time of signature, ratification,
acceptance, approval or accession that its courts will apply the
Convention only if both the place indicated in the instrument where the
bill is drawn, or the note is made, and the place of payment indicated in
the instrument are situated in Contracting States.

(2) No other reservations are permitted.

Article 89

(1) This Convention enters into force on the first day of the month
following the expiration of twelve months after the date of deposit of
the tenth instrument of ratification, acceptance, approval or accession.

(2) When a State ratifies, accepts, approves or accedes to this
Convention after the deposit of the tenth instrument of ratification,
acceptance, approval or accession, this Convention enters into force in
respect of that State on the first day of the month following the
expiration of twelve months after the date of deposit of its instrument
of ratification, acceptance, approval or accession.

Article 90

(1) A Contracting State may denounce this Convention by a formal
notification in writing addressed to the depositary.

(2) The denunciation takes effect on the first day of the month
following the expiration of six months after the notification is received
by the depositary. Where a longer period for the denunciation to take
effect is specified in the notification, the denunciation takes effect
upon the expiration of such longer period after the notification is
received by the depositary. The Convention remains applicable to
instruments drawn or made before the date at which the denunciation takes
effect.

DONE at . . ., this . . . day of . . ., one thousand nine hundred and
eighty-seven in a single original, of which the Arabic, Chinese, English,
French, Russian and Spanish texts are equally authentic.

IN WITNESS WHEREOF the undersigned plenipotentiaries, being duly
authorized by their respective Governments, have signed this Convention.

Convention on International Bills of Exchange and International Promissory Notes

Convention on International Bills of Exchange and International Promissory Notes in United States

Convention on International Bills of Exchange and International Promissory Notes

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