The role of a notary public in Bills of Exchange
According to section 3 of the Bills of Exchange Act, 1882, a Bill of Exchange is an unconditional order signed by the drawer and addressed to the drawee, ordering them to pay a fixed sum of money to a specified person, known as the payee. Bills of Exchange can take two forms: either a sight bill when the drawee pays on demand, or a time bill when they pay at a future date.
Noting a dishonoured Bill of Exchange
Although Bills of Exchange are declining in importance, you can use a notary to note and protest a dishonoured (unpaid) bill. Under the Bills of Exchange Act, if a payee refuses to accept a Bill of Exchange on first presentation, or refuses to pay when the bill is due, you can protest for non-acceptance or non-payment. Your notary public will first present the bill for acceptance or payment and if the drawee still refuses, it will be noted. Your notary public will prepare a minute noting the date and the reasons for the dishonour, and attach it to the bill.
Protesting a dishonoured Bill of Exchange
If you choose to have the dishonour certified by your notary public, this certificate is referred to as a protest. If the drawee becomes insolvent before the bill matures, you may choose to have the fact noted and certified, when the certificate becomes a ‘protest for better security’. The payee must wait until the bill matures to pursue payment through the courts.
Neither noting or protesting is compulsory for UK business. However, under section 104 of the Act, any foreign bill that is dishonoured must be protested if protest is required by the law of the land where the bill was drawn. Noting and protesting is considered to be prima facie evidence by the courts. It’s good practice to note a dishonour, as it can later be protested if you intend to pursue legal action.
Contact South London Notaries
South London Notaries are experienced in all aspects of notary public business. If you need help with noting and protesting a dishonoured Bill of Exchange, please contact us for more information, or head here to find out more about the services we offer.