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Days of Grace

bill, payable, day, allowed, drawn and bank

DAYS OF GRACE. Where a bill of ex change is not payable on demand, three days, called " days of grace," are allowed. Ori ginally they would be allowed to an accep tor as a matter of grace ; they are now, how ever, claimed by an acceptor as a matter of right and are fixed by law. The Bills of Exchange Act, 1882, provides :- " Scction 14. Where a bill is not payable on demand, the day on which it falls due is determined as follows : " (1) Three days, called clays of grace, are, in every case where the bill itself does not otherwise provide, added to the time of payment as fixed by the bill, and the bill is due and payable on the last day of grace : Provided that " (a) When the last day of grace falls on Sunday, Christmas Day, Good Friday, or a day appointed by royal pro clamation as a public fast or thanksgiving day, the bill is, except in the case herein after provided for, due and payable on the preceding business day ; " (b) When the last day of grace is a bank holiday (other than Christmas Day or Good Friday) under the Bank Holidays Act, 1S71, and Acts amending or extending it, or when the last day of grace is a Sunday and the second day of grace is a bank holiday, the bill is due and payable on the succeeding business day." Thus a bill due February 1, when the three days are added, is actually payable on February 4.

If a bill is specially drawn as payable without days of grace, or as payable on a certain day fixed, e.g. " on February 1 fixed," no days of grace are allowed. A bill payable " at sight." on presentation," or " on demand," does not take days of grace, but a bill payable " after sight " or " after date " does take the three days.

Bills drawn by the Bank of England upon itself do not take days of grace, but that exception does not apply in the case of any other bill drawn upon the Bank of England.

Days of grace are not allowed upon a cheque. Days of grace on a promissory note are the same as in the case of a bill.

If a bill or promissory note is payable by instalments. the three days are allowed upon each instalment.

A foreign bill domiciled in this country takes the three days of grace, but a bill drawn in England and domiciled abroad is payable according to the laws of the country where it is payable.

In many countries days of grace are not allowed, e.g. France, Germany, Russia, Norway, Sweden, Denmark, Holland, Bel gium, Italy. in Canada three days are allowed, but in the United States the number varies.

If a person risks taking a bill which has been accepted contrary to the tenor of the bill, it should be presented on the day ap pointed by the acceptance, without days of grace. Opinions appear to differ as to whether days of grace can be claimed. If, however, days of grace are claimed by the acceptor, the bill should be formally noted, the usual notice given to all parties, and the bill presented again in three days' time.

An instrument which is drawn payable at a certain period after the arrival of a ship does not take days of grace, because the document is not a bill according to the meaning of the Bills of Exchange Act.

Where a bill is payable after a specified event it must be an event which is certain to happen. The death of a person is a certain event, but the arrival of a ship is not. (See BILL OF EXCHANGE, FIRE INSURANCE, LIFE POLICY, PAYMENT OF BILL.) Examples of the dates upon which bills, drawn at various currencies, are due, are given under TIME OF PAYMENT OF BILL.