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BILLS OF EXCHANGE ACT.

ARRANGEMENT OF SECTIONS.

   Section

PART I
INTERPRETATION.

   1.   Interpretation.

PART II
BILLS OF EXCHANGE.

Form and interpretation.

   2.   Bill of exchange defined.

   3.   Inland and foreign bills.

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

   5.   Address to drawee.

   6.   Certainty required as to payee.

   7.   What bills are negotiable.

   8.   Sum payable.

   9.   Bill payable on demand.

   10.   Bill payable at a future time.

   11.   Omission of date in bill payable after date.

   12.   Antedating and postdating.

   13.   Computation of time of payment.

   14.   Case of need.

   15.   Optional stipulations by drawer or endorser.

   16.   Definition and requisites of acceptance.

   17.   Time for acceptance.

   18.   General and qualified acceptances.

   19.   Inchoate instruments.

   20.   Delivery.

Capacity and authority of parties.

   21.   Capacity of parties.

   22.   Signature essential to liability.

   23.   Forged or unauthorised signature.

   24.   Procuration signatures.

   25.   Person signing as agent or in representative capacity.

The consideration for a bill.

   26.   Value and holder for value.

   27.   Accommodation bill or party.

   28.   Holder in due course.

   29.   Presumption of value and good faith.

Negotiation of bills.

   30.   Negotiation of bill.

   31.   Requisites of a valid endorsement.

   32.   Conditional endorsement.

   33.   Endorsement in blank and special endorsement.

   34.   Restrictive endorsement.

   35.   Negotiation of overdue or dishonoured bill.

   36.   Negotiation of bill to party already liable on the bill.

   37.   Rights of the holder.

General duties of the holder.

   38.   When presentment for acceptance is necessary.

   39.   Time for presenting bill payable after sight.

   40.   Rules as to presentment for acceptance and excuses for nonpresentment.

   41.   Nonacceptance.

   42.   Dishonour by nonacceptance and its consequences.

   43.   Duties as to qualified acceptances.

   44.   Rules as to presentment for payment.

   45.   Excuses for delay or nonpresentment for payment.

   46.   Dishonour by nonpayment.

   47.   Notice of dishonour and effect of nonnotice.

   48.   Rules as to notice of dishonour.

   49.   Excuses for nonnotice and delay.

   50.   Noting or protest of bill.

   51.   Duties of holder as regards drawee or acceptor.

Liabilities of parties.

   52.   Bill not assignment of funds in hands of drawee.

   53.   Liability of acceptor.

   54.   Liability of drawer or endorser.

   55.   Stranger signing bill liable as endorser.

   56.   Measure of damages against parties to dishonoured bill.

   57.   Transferor by delivery and transferee.

Discharge of bill.

   58.   Payment in due course.

   59.   Banker paying demand draft on which endorsement is forged.

   60.   Acceptor the holder at maturity.

   61.   Express waiver.

   62.   Cancellation.

   63.   Alteration of bill.

Acceptance and payment for honour.

   64.   Acceptance for honour supra protest.

   65.   Liability of acceptor for honour.

   66.   Presentment to acceptor for honour.

   67.   Payment for honour supra protest.

Lost instruments.

   68.   Holder's right to duplicate of lost bill.

   69.   Action on lost bill.

Bill in a set.

   70.   Rules as to sets.

Conflict of laws.

   71.   Rules where laws conflict.

PART III
CHEQUES ON A BANKER.

   72.   Cheque defined.

   73.   Presentment of cheque for payment.

   74.   Revocation of banker's authority.

Crossed cheques.

   75.   General and special crossings defined.

   76.   Crossing by drawer or after issue.

   77.   Crossing a material part of cheque.

   78.   Duties of banker as to crossed cheques.

   79.   Protection to banker and drawer where cheque is crossed.

   80.   Effect of words "not negotiable".

   81.   Protection to collecting banker.

PART IV
PROMISSORY NOTES.

   82.   Promissory note defined.

   83.   Delivery necessary.

   84.   Joint and several notes.

   85.   Note payable on demand.

   86.   Presentment of note for payment.

   87.   Liability of maker.

   88.   Application of Part II to notes.

PART V
SUPPLEMENTARY.

   89.   Good faith.

   90.   Signature.

   91.   Computation of time.

   92.   When noting equivalent to protest.

   93.   Protest when notary not accessible.

   94.   Dividend warrants may be crossed.

   95.   Savings.

      Schedule   Form of protest which may be used when the services of a notary cannot be obtained.

CHAPTER 68
BILLS OF EXCHANGE ACT.

Commencement: 15 August, 1933.

   An Act relating to bills of exchange, cheques and promissory notes.

PART I
INTERPRETATION.

1.   Interpretation.

   In this Act, unless the context otherwise requires—

   (a)   "acceptance" means an acceptance completed by delivery or notification;

   (b)   "action" includes counterclaim and setoff;

   (c)   "banker" includes a body of persons whether incorporated or not who carry on the business of banking;

   (d)   "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;

   (e)   "bearer" means the person in possession of a bill or note which is payable to bearer;

   (f)   "bill" means bill of exchange, and "note" means promissory note;

   (g)   "delivery" means transfer of possession, actual or constructive, from one person to another;

   (h)   "endorsement" means an endorsement completed by delivery;

   (i)   "holder" means the payee or endorsee of a bill or note who is in possession of it, or the bearer of a bill or note;

   (j)   "issue" means the first delivery of a bill or note, complete in form, to a person who takes it as a holder;

   (k)   "person" includes a body of persons whether incorporated or not;

   (l)   "value" means valuable consideration;

   (m)   "written" includes printed, and "writing" includes print.

PART II
BILLS OF EXCHANGE.

Form and interpretation.

2.   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 reimburse himself or herself 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.

3.   Inland and foreign bills.

   (1) An inland bill is a bill which is or on the face of it purports to be—

   (a)   both drawn and payable within East Africa; or

   (b)   drawn within East Africa upon some person resident in East Africa,

and any other bill is a foreign bill.

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

4.   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 or her option, either as a bill of exchange or as a promissory note.

5.   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 two or more drawees in succession is not a bill of exchange.

6.   Certainty required as to payee.

   (1) Where a bill is not payable to bearer, the payee must be named or otherwise indicated in it 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 nonexisting person, the bill may be treated as payable to bearer.

7.   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 endorsement is an endorsement 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 endorsement, is expressed to be payable to the order of a specified person, and not to him or her or his or her order, it is, nevertheless, payable to him or her or his or her order at his or her option.

8.   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 installments;

   (c)   by stated installments, with a provision that upon default in payment of any installment 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 of the bill.

9.   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 endorsed when it is overdue, it shall, as regards the acceptor who so accepts, or any endorser who so endorses it, be deemed a bill payable on demand.

10.   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.

11.   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 in the bill the true date of issue or acceptance, and the bill shall be payable accordingly; but—

   (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.

12.   Antedating and postdating.

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

   (2) A bill is not invalid by reason only that it is antedated or postdated, or that it bears a date on a Sunday.

13.   Computation of time of payment.

   Where a bill is not payable on demand, the date 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; but—

      (i)   when the last day of grace falls on a Sunday, Christmas Day or Good Friday, the bill is, except in the case hereafter 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, 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 nonacceptance, or for nondelivery;

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

14.   Case of need.

   The drawer of a bill and any endorser may insert in it 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 nonacceptance or nonpayment. 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 or she may think fit.

15.   Optional stipulations by drawer or endorser.

   The drawer of a bill and any endorser may insert in the bill an express stipulation—

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

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

16.   Definition and requisites of acceptance.

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

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

   (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 or her promise by any other means than the payment of money.

17.   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 nonpayment.

   (2) When a bill payable after sight is dishonoured by nonacceptance, 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.

18.   General and qualified acceptances.

   (1) An acceptance is either—

   (a)   general; or

   (b)   qualified.

   (2) A general acceptance assents without qualification to the order of the drawer.

   (3) A qualified acceptance in express terms varies the effect of the bill as drawn and, in particular, an acceptance is qualified which is—

   (a)   conditional, that is to say, which makes payment by the acceptor dependent on the fulfillment of a condition stated in it;

   (b)   partial, that is to say, an acceptance to pay part only of the amount for which the bill is drawn;

   (c)   local, that is to say, an acceptance to pay only at a particular specified place; but an acceptance to pay at a particular place is a general acceptance unless it expressly states that the bill is to be paid there only and not elsewhere;

   (d)   qualified as to time;

   (e)   the acceptance of some one or more of the drawees, but not of all.

19.   Inchoate instruments.

   (1) Where a simple signature on a blank stamped paper is delivered by the signer in order that it may be converted into a bill, it operates as a prima facie authority to fill it up as a complete bill for any amount the stamp will cover, using the signature for that of the drawer, or the acceptor, or an endorser; and, in like manner, when a bill is wanting in any material particular, the pers

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