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Dishonour by Non-Acceptance

Dishonour of a negotiable instrument can occur through non-acceptance or non-payment. Non-acceptance is when the drawee does not accept a bill of exchange when required, while non-payment is when the maker, acceptor, or drawee does not pay a promissory note, bill of exchange, or cheque when required. Dishonour means the loss of honour for the instrument, which makes it unsuitable for realizing payment.

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60 views

Dishonour by Non-Acceptance

Dishonour of a negotiable instrument can occur through non-acceptance or non-payment. Non-acceptance is when the drawee does not accept a bill of exchange when required, while non-payment is when the maker, acceptor, or drawee does not pay a promissory note, bill of exchange, or cheque when required. Dishonour means the loss of honour for the instrument, which makes it unsuitable for realizing payment.

Uploaded by

Aabroo Fatima
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Dishonour by non-acceptance.

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-A bill of exchange, is said to be dishonoured by non-acceptance when the drawee or one of several,
drawees not being partners, makes default in acceptance upon being duly required to accept the bill, or
where presentment is excused and the bill is not accepted. Where the drawee is incompetent to
contract, or the acceptance is qualified, the bill may be treated as dishonoured.

Dishonour by non-payment. –
-- A promissory note, bill of exchange or cheque is said to be dishonoured by non-payment when the
maker of the note, acceptor of the bill or drawee of the cheque makes default in payment upon being
duly required to pay the same.

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Dishonour of a negotiable instrument means the loss of honour for the


instrument on the part of the maker, drawee or acceptor, which renders
the instrument unsuitable for the realization of the payment.

Note that the dishonour of a negotiable instrument can be done by the


maker, drawee or the acceptor depending on the case.

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