CHAPTER 48:02
BILLS OF EXCHANGE

ARRANGEMENT OF SECTIONS

   SECTION

PART I
PRELIMINARY

   1.   Short title

   2.   Interpretation

PART II
BILLS OF EXCHANGE

Form and Interpretation

   3.   Bill of exchange defined

   4.   Inland and foreign bills

   5.   Effect where different parties to bill are the same person

   6.   Address to drawee

   7.   Certainty required as to payee

   8.   What bills are negotiable

   9.   Sum payable

   10.   Bill payable on demand

   11.   Bill payable at a future time

   12.   Omission of date in bill payable after date

   13.   Ante-dating and post-dating

   14.   Computation of time of payment

   15.   Case of need

   16.   Optional stipulations by drawer or indorser

   17.   Definition and requisites of acceptance

   18.   Time for acceptance

   19.   General and qualified acceptances

   20.   Inchoate instruments

   21.   Delivery

Capacity and Authority of Parties

   22.   Capacity of parties

   23.   Signature essential to liability

   24.   Forged or unauthorized signature

   25.   Procuration signatures

   26.   Person signing as agent or in representative capacity

The Consideration for a Bill

   27.   Value and holder for value

   28.   Accommodation bill or party

   29.   Holder in due course

   30.   Presumption of value and good faith

Negotiation of Bills

   31.   Negotiation of bill

   32.   Requisites of a valid indorsement

   33.   Conditional indorsement

   34.   Indorsement in blank and special indorsement

   35.   Restrictive indorsement

   36.   Negotiation of overdue or dishonoured bill

   37.   Negotiation of bill to party already liable thereon

   38.   Rights of the holder

General Duties of the Holder

   39.   When presentment for acceptance is necessary

   40.   Time for presenting bill payable after sight

   41.   Rules as to presentment for acceptance, and excuses for non-presentment

   42.   Non-acceptance

   43.   Dishonour by non-acceptance and its consequences

   44.   Duties as to qualified acceptance

   45.   Rules as to presentment for payment

   46.   Excuses for delay or non-presentment for payment

   47.   Dishonour by non-payment

   48.   Notice of dishonour and effect of non-notice

   49.   Rules as to notice of dishonour

   50.   Excuses for non-notice and delay

   51.   Noting or protest of bill

   52.   Duties of holder as regards drawee or acceptor

Liabilities of Parties

   53.   Funds in hands of drawee

   54.   Liability of acceptor

   55.   Liability of drawer or indorser

   56.   Stranger signing bill liable as indorser

   57.   Measure of damages against parties to dishonoured bill

   58.   Transferor by delivery and transferee

Discharge of Bill

   59.   Payment in due course

   60.   Banker paying demand draft whereon indorsement is forged

   61.   Acceptor the holder at maturity

   62.   Express waiver

   63.   Cancellation

   64.   Alteration of bill

Acceptance and Payment for Honour

   65.   Acceptance for honour supra protest

   66.   Liability of acceptor for honour

   67.   Presentment to acceptor for honour

   68.   Payment for honour supra protest

Lost Instruments

   69.   Holder’s right to duplicate of lost bill

   70.   Action on lost bill

Bill in a Set

   71.   Rules as to sets

Conflict of Laws

   72.   Rules where laws conflict

PART III
CHEQUES ON A BANKER

   73.   Cheque defined

   74.   Presentment of cheque for payment

   75.   Revocation of banker’s authority

   76.   Rights of bankers collecting cheques not indorsed by holders

   77.   Unindorsed cheques as evidence of payment

   78.   Protection of bankers paying unindorsed or irregularly indorsed cheques, etc.

   79.   Protection of bankers collecting payment of cheques, etc.

Crossed Cheques

   80.   General and special crossings defined

   81.   Crossing by drawer or after issue

   82.   Crossing a material part of cheque

   83.   Duties of banker as to crossed cheques

   84.   Protection to banker and drawer where cheque is crossed

   85.   Effect of crossing on holder

   86.   Application of certain provisions of this Act to instruments not being bills of exchange

   87.   Government to be regarded as a customer of a banker

   88.   Construction

PART IV
PROMISSORY NOTES

   89.   Promissory note defined

   90.   Delivery necessary

   91.   Joint and several notes

   92.   Note payable on demand

   93.   Presentment of note for payment

   94.   Liability of maker

   95.   Application of Part II to notes

PART V
SUPPLEMENTARY

   96.   Good faith

   97.   Signature

   98.   Computation of time

   99.   When noting equivalent to protest

   100.   Protest when notary not accessible

   101.   Dividend warrants may be crossed

   102.   Savings

       Schedule

15 of 1967

An Act relating to Bills of Exchange, Cheques and Promissory Notes, and Matters Incidental thereto

[28TH JULY 1967]

PART I
PRELIMINARY

1.   Short title

   This Act may be cited as the Bills of Exchange Act.

2.   Interpretation

   In this Act, unless the context otherwise requires—

   “acceptance” means an acceptance completed by delivery or notification;

   “action” includes counter claim and set off;

   “banker” includes a body of persons whether incorporated or not who carry on the business of banking;

   “bankrupt” includes any person whose estate is vested in a trustee or assignee under the law for the time being in force relating to bankruptcy;

   “bearer” means the person in possession of a bill or note which is payable to bearer;

   “bill” means bill of exchange, and “note” means promissory note;

   “delivery” means transfer of possession, actual or constructive, from one person to another;

   “holder” means the payee or indorsee of a bill or note who is in possession of it, or the bearer thereof;

   “indorsement” means an indorsement completed by delivery;

   “issue” means the first delivery of a bill or note, complete in form to a person who takes it as a holder;

   “value” means valuable consideration;

   “written” includes printed, and “writing” includes print.

PART II
BILLS OF EXCHANGE

Form and Interpretation

3.   Bill of exchange defined

   (1) 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.

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

   (3) 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 re-imburse himself or a particular account to be debited with the amount; or

   (b)   a statement of the transaction which gives rise to the bill, is unconditional.

   (4) A bill is not invalid by reason—

   (a)   that it is not dated;

   (b)   that it does not specify the value given, or that any value has been given therefor;

   (c)   that it does not specify the place where it is drawn or the place where it is payable.

4.   Inland and foreign bills

   (1) An inland bill is a bill which is or on the face of it purports to be both drawn and payable within Malawi, or drawn within Malawi upon some person resident therein. Any other bill is a foreign bill.

   (2) Unless the contrary appear on the face of the bill the holder may treat it as an inland bill.

5.   Effect where different parties to bill are the same person

   (1) 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.

   (2) 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 option, either as a bill of exchange or as a promissory note.

6.   Address to drawee

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

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

7.   Certainty required as to payee

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

   (2) A bill may be made payable to two or more payees jointly, or it may be made payable in the alternative to one of two, or one or some of several payees. A bill may also be made payable to the holder of an office for the time being

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

8.   What bills are negotiable

   (1) When a bill contains words prohibiting transfer, or indicating an intention that it should not be transferable, it is valid as between the parties thereto, but is not negotiable.

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

   (3) A bill is payable to bearer which is expressed to be so payable, or on which the only or last indorsement is an indorsement in blank.

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

   (5) 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 his order, it is nevertheless payable to him or his order at his option.

9.   Sum payable

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

   (a)   with interest;

   (b)   by stated instalments;

   (c)   by stated instalments, with a provision that upon default in payment of any instalment the whole shall become due;

   (d)   according to an indicated rate of exchange or according to a rate of exchange to be ascertained as directed by the bill.

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

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

10.   Bill payable on demand

   (1) A bill is payable on demand—

   (a)   which is expressed to be payable on demand, or at sight, or on presentation; or

   (b)   in which no time for payment is expressed.

   (2) 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.

11.   Bill payable at a future time

   (1) A bill is payable at a determinable future time within the meaning of this Act which is expressed to be payable—

   (a)   at a fixed period after date or sight;

   (b)   on or at a fixed period after the occurrence of a specified event which is certain to happen, though the time of happening may be uncertain.

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

12.   Omission of date in bill payable after date

   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:

   Provided that—

   (a)   where the holder in good faith and by mistake inserts a wrong date; and

   (b)   in every case where a wrong date is inserted, if the bill subsequently comes into the hands of a holder in due course, the bill shall not be avoided thereby, but shall operate and be payable as if the date so inserted had been the true date.

13.   Ante-dating and post-dating

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

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

14.   Computation of time of payment

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

   (a)   three days, called days 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—

      (i)   when the last day of grace falls on Sunday, Christmas Day, or Good Friday, the bill is, except in the case hereinafter provided for, due and payable on the preceding business day;

      (ii)   when the last day of grace is a public holiday (other than Christmas Day or Good Friday) or when the last day of grace is a Sunday and the second day of grace is a public holiday (other than Christmas Day), the bill is due and payable on the succeeding business day;

   (b)   where a bill is payable at a fixed period after date, after sight, or after the happening of a specified event, the time of payment is determined by excluding the day from which the time is to begin to run and by including the day of payment;

   (c)   where a bill is payable at a fixed period after sight, the time begins to run from the date of the acceptance if the bill be accepted, and from the date of noting or protest if the bill be noted or protested for non-acceptance, or for non-delivery;

   (d)   the term “month” in a bill means calendar month.

15.   Case of need

   The drawer of a bill and any endorser 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 may think fit.

16.   Optional stipulations by drawer or indorser

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

   (a)   negativing or limiting his own liability to the holder;

   (b)   waiving as regards himself some or all of the holder’s duties.

17.   Definition and requisites of acceptance

   (1) The acceptance of a bill is the signification by the drawee of his assent to the order of the drawer.

   (2) An acceptance is invalid unless it complies with the following conditions, 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.

18.   Time for acceptance

   (1) A bill may be accepted—

   (a)   before it has been signed by the drawer, or while otherwise incomplete;

   (b)   when it is overdue, or after it has been dishonoured by a previous refusal to accept, or by non-payment.

   (2) 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.

19.   General and qualified acceptances

   (1) An acceptance is either general or qualified.

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