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Presentment for Acceptance

bill, drawee, accept, time, banker, holder, reasonable, accepted, ment and bills

PRESENTMENT FOR ACCEPTANCE. When a bill of exchange is actually presented to a drawee in order that it may be accepted by him, it is a presentment for acceptance.

By Section 39 of the Bills of Exchange Act, 1882 :— " (1) Where a bill is payable after sight, presentment for acceptance is necessary in order to fix the maturity of the instrument.

" (2) Where a bill expressly stipulates that it shall be presented for accept ance, or where a bill is drawn pay able 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.

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

" (4) Where the holder of a bill, drawn pay able 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." With regard to the time for presenting a bill payable after sight, Section 40 provides as follows : " (1) Subject to the provisions of this Act, when a bill payable after sight is negotiated, the holder must either present it for acceptance or nego tiate it within a reasonable time.

" (2) If he do not do so, the drawer and all indorsers prior to that holder are discharged.

" (3) 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." The rules as to presentment for acceptance and the excuses for non-presentment are given in Section 41 : " (1) A bill is duly presented for accept ance which is presented in accord ance with the following rules : " (a) The presentment must be made by or on behalf of the holder to the drawee or to some person authorised to accept or refuse acceptance on his behalf at a reasonable hour on a business day and before the bill is overdue : " (b) Where a bill is addressed to two or more drawees, who are not partners, present ment must be made to them all, unless one has authority to accept for all, then pre sentment may be made to him only : " (c) Where the drawee is dead, presentment may be made to his personal representa tive : " (d) Where the drawee is bank rupt, presentment may be made to him or to his trustee : " (e) Where authorised by agree ment or usage, a present ment through the post office is sufficient.

" (2) Presentment in accordance with these rules is excused, and a bill may be treated as dishonoured by non-acceptance :— " (a) Where the drawee is dead or bankrupt, or is a fictitious person or a person not having capacity to contract by bill : " (b) Where, after the exercise of reasonable diligence, such presentment cannot be effected : " (c) Where, although the pre sentment has been irregular, acceptance has been refused on some other ground.

" (3) The fact that the holder has reason to believe that the bill, on present ment, will be dishonoured does not excuse presentment." In practice a bill is presented for accept ance as soon as possible after it has been drawn, and until it has been accepted the drawee is under no liability whatever with regard to it. An after date bill having more than three days to run before maturity, is, in London, presented for acceptance. The sooner the holder of an unaccepted bill procures the drawee's acceptance the better, for he then obtains the further security in the liability of the acceptor. When bills are received by a banker in order that he may get them accepted, they are presented to the drawee on the day of receipt, and if the drawee does not accept when they are pre sented, it is customary to leave the bills with him for twenty-four hours (exclusive of Sundays and holidays), or until close of business on a half-holiday if the twenty four hours are not completed, in which to decide whether, or not, he will accept them. When a bill is left for acceptance a banker marks it so that he may know that he gets the same bill back again. If a banker is negligent in obtaining an acceptance he may render himself liable thereon, especially in the case of a bill drawn payable at so many days " after sight," as the drawer and in dorsers may thereby be discharged. The law does not lay down any absolute rule as to what time is reasonable or unreasonable in which to carry out an instruction to obtain an acceptance, but in most cases a banker would present a bill for acceptance on the day that he receives it. Having left a bill with a drawee, it is part of the banker's duty to call again for it and not to wait till the drawee returns it to him, though an arrange ment may be made with the drawee to return it.

Where bills of lading and other documents are attached to a bill, they are exhibited to , the drawee at the same time as the bill is presented for acceptance, but if the bill is left with the drawee until the next day the documents are retained by the banker and not left with the drawee. The banker, how ever, may have instructions to deliver up the documents to the drawee after he has ac cepted the bill. In the case of a foreign bill sent for acceptance, instructions usually accompany the bill as to what has to be done in the event of non-acceptance, as " protest if not accepted " or " if not accepted do not protest but send an advice by wire " or " no expense to be incurred." Where a bill is received from a correspon dent in order to obtain the acceptance of the drawee, and the drawee lives at such a dis tance as to necessitate either sending the bill to him or asking him to call at the bank to accept it, the correspondent should be advised of what is being done so that he may understand the delay. (See BILL OF EXCHANGE.)