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UNCITRAL Convention on International Bills of Exchange and International Promissory Notes, 1988

CHAPTER I. - Sphere Of Application And Form Of The Instrument

Article 1

Article 2

Article 3

CHAPTER II. - Interpretation

Section 1. - General provisions

Article 4

Article 5

Article 6

Section 2. - Interpretation of formal requirements

Article 7

Article 8

Article 9

Article 10

Article 11

Section 3. - Completion of an incomplete instrument

Article 12

CHAPTER III. - Transfer

Article 13

Article 14

Article 15

Article 16

Article 17

Article 18

Article 19

Article 20

Article 21

Article 22

Article 23

Article 24

Article 25

Article 26

CHAPTER IV. - Rights And Liabilities

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

Article 27

Article 28

Article 29

Article `30

Article `31

Article `32

Section `2. - Liabilities of the parties

A. - General provisions

Article `33

Article `34

Article `35

Article `36

Article `37

B. - The drawer

Article `38

C. - The maker

Article `39

D. - The drawee and the acceptor

Article `40

Article `41

Article `42

Article `43

E. - The endorser

Article `44

F. - The transferor by endorsement or by mere delivery

Article `45

G. - The guarantor

Article `46

Article `47

Article `48

CHAPTER `V. - Presentment, Dishonour By Non-Acceptance Or Non-Payment, And Recourse

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

Article `49

Article `50

Article `51

Article `52

Article `53

Article `54

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

Article `55

Article `56

Article `57

Article `58

Section `3. - Recourse

Article `59

A. - Protest

Article 60

Article 61

Article 62

Article 63

B. - Notice of dishonour

Article 64

Article 65

Article 66

Article 67

Article 68

Section 4. - Amount payable

Article 69

Article 70

Article 71

CHAPTER VI. - Discharge

Section 1. - Discharge by payment

Article 72

Article 73

Article 74

Article 75

Article 76

Section 2. - Discharge of other parties

Article 77

CHAPTER VII. - Lost Instruments

Article 78

Article 79

Article 80

Article 81

Article 82

Article 83

CHAPTER VIII. - Limitation (Prescription)

Article 84

CHAPTER IX. - Final Provisions

Article 85

Article 86

Article 87

Article 88

Article 89

Article 90

[Post Provisions]

[Post Clauses (If any: Signed; Witnessed; Done; Authentic Texts; & Deposited Clauses)]

Annex - Explanatory Note by the UNCITRAL Secretariat on the United Nations Convention on International Bills of Exchange and International Promissory Notes *[NOTE]

Introduction

A. - Background To The Convention

B. - Salient Features Of The Convention

1. Scope of application and form of the instrument

2. Interpretation of the Convention

3. The concepts of "holder" and "protected holder"

4. Transfer warranties

5. Guarantees and avals

6. Other novel provisions of practical importance

7. Final clauses

Notes

*[NOTE]

Endnotes

Endnotes

Metadata

SiSU Metadata, document information

Manifest

SiSU Manifest, alternative outputs etc.

UNCITRAL Convention on International Bills of Exchange and International Promissory Notes, 1988

United Nations (UN)

copy @ Lex Mercatoria

CHAPTER IX. - Final Provisions

Annex - Explanatory Note by the UNCITRAL Secretariat on the United Nations Convention on International Bills of Exchange and International Promissory Notes *[NOTE]

B. - Salient Features Of The Convention

6. Other novel provisions of practical importance

33. The Convention introduces a number of provisions which ought to be of benefit in modern commercial practice. In this, the Convention reflects its recent development, while many of the rules found in the negotiable instruments laws of the world have not kept pace with changing business practices. The following novel provisions are of note:

(a) Instruments with floating rates of interest

34. The Convention permits instruments to bear interest at a variable rate without loss of negotiability. Where the technique used is in accordance with the requirements of the Convention, the sum payable is deemed to be a definite sum despite the variable rate of interest. For the protection of debtors, the Convention permits rates to vary only in accordance with provisions stipulated in the instrument and in relation to one or more reference rates published or otherwise publicly available. As a further protection, the reference may 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. There may also be stipulated limits to the permissible variations in the interest rate.

(b) Rates of exchange outside instrument

35. The Convention also permits reference to a rate of foreign exchange outside an instrument, e.g. a bank exchange rate in a particular place at a certain date, in calculating the amount payable under the instrument. Here as well, the sum payable under an instrument is deemed to be a definite sum even though the instrument states that it is to be paid according to a rate of exchange indicated in the instrument or to be determined as directed by the instrument.

(c) Instruments payable in instalments

36. The Convention allows instruments that are subject to it to be made payable by instalments at successive dates. They may also contain an "acceleration clause", i.e. a stipulation that upon default in payment of any instalment the entire unpaid balance becomes immediately due.

(d) Instruments denominated and payable in a monetary unit of account

37. The Convention creates a regime in which instruments may be made payable in units of value other than the official currencies of nation States. This is accomplished by the definition of the terms "money" and "currency", which, in addition to referring to normal mediums of exchange adopted by Governments as their official currency, include a monetary unit of account which is established by an intergovernmental institution or by agreement between two or more States, e.g. the Special Drawing Right (SDR) of the International Monetary Fund, the European Currency Unit (ECU) and the Unit of Account of the Preferential Trade Area for Eastern and Southern African States (UAPTA). The Convention also contains a useful new rule selecting a currency of payment where the monetary unit of account in which an instrument is payable is not transferable between the person liable to pay the instrument and the person receiving the payment.

(e) Foreign currency obligations

38. The Convention attempts to avoid the controversies that can arise with instruments drawn or made in a currency other than that of the place where payment is to be made. The text provides that, except for the cases where the drawer or maker of an instrument has indicated that it must be paid in a specified currency other than the currency in which the sum payable is expressed, payment must be made in the latter currency. Where applicable, this rule will prevent a debtor from discharging its obligation by payment in another currency, e.g. a local one. It should be of assistance by providing greater certainty in cases involving currency value fluctuations.

39. In an effort to avoid infringing on exchange control regulations and other provisions relating to the protection of the currency of a State, the Convention provides a number of modifying rules to apply in exceptional circumstances.

(f) Signature not in handwriting

40. Here as well the Convention attempts to adapt the law to new technology by providing that the word "signature" includes not only a handwritten signature, but also a facsimile or an equivalent authentication effected by any other means.

(g) Rules on lost instruments

41. New rules are provided concerning lost instruments. In particular, a party from whom payment of a lost instrument is claimed may require the person claiming payment to give security in order to indemnify it for any loss which it may suffer by reason of the subsequent payment of the lost instrument.

(h) Short form of protest

42. The Convention relaxes the highly precise rules which are found in common law jurisdictions on protest. It also provides new common rules for Geneva States that lack regulation concerning the procedures for effecting protest. Under the new regime, unless an instrument stipulates that protest must be made, 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. The Convention also extends to four business days the period that is usually allowed to make protest.

(i) Uniform period of prescription

43. The Convention provides a single period of prescription or limitation of actions. It is set at four years for almost all actions arising on an instrument under the Convention. The only exception is that, where a party pays an instrument on which another was primarily liable, the party's action for reimbursement (recourse) is barred after one year.

(j) Drawing of instruments "without recourse"

44. The Convention contains a rule that should facilitate the practice of forfaiting. Under the new rule, the drawer of a bill may exclude or limit its own liability for acceptance or for payment by an express stipulation on the bill, e.g. by drawing the bill "without recourse". This stipulation will be effective only if another party is or becomes liable on the bill.


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