Convention on International Bills of Exchange and International Promissory Notes

Convention on International Bills of Exchange and International Promissory Notes

 

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;

(c) The place indicated next to the name of the drawee;

(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;

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

(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;

(c) Is dated;

(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;

(c) Is dated;

(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;

(c) “Instrument”means a bill or a note;

(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.

 

Conclusion

Notes

See Also

References and Further Reading

About the Author/s and Reviewer/s

Author: international

Mentioned in these Entries

Bills, Convention on International Bills of Exchange and International Promissory Notes 10, Convention on International Bills of Exchange and International Promissory Notes 2, Convention on International Bills of Exchange and International Promissory Notes 3, Convention on International Bills of Exchange and International Promissory Notes 4, Convention on International Bills of Exchange and International Promissory Notes 5, Convention on International Bills of Exchange and International Promissory Notes 6, Convention on International Bills of Exchange and International Promissory Notes 7, Convention on International Bills of Exchange and International Promissory Notes 8, Convention on International Bills of Exchange and International Promissory Notes 9, Conventions: Chronological Index 1971-1990, International commercial arbitration, Trade and Commercial Relations conventions.


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