Bills of Exchange Act

This section says the Act may be cited as the Bills of Exchange Act.

This section defines key terms used in the Act, including words about bills, notes, delivery, holders, value, and writing.

This section defines when a written payment order counts as a bill of exchange, and states when an instrument is not one.

A bill is inland if it is drawn and payable within Malawi, or drawn in Malawi on a resident there; otherwise it is foreign. The holder may treat a bill as inland unless the bill shows otherwise on its face.

A bill may be made payable to the drawer or drawee, and in certain cases the holder may choose to treat it as either a bill of exchange or a promissory note.

The drawee must be named or otherwise indicated in a bill with reasonable certainty.

A bill that is not payable to bearer must identify the payee with reasonable certainty.

This section says when a bill is negotiable, and how bills are treated as payable to bearer or to order.

A bill’s payable amount is still treated as a fixed sum even if it includes interest, instalments, acceleration on default, or exchange-rate wording.

A bill counts as payable on demand if it says so, is payable at sight or on presentation, or does not state a payment time.

A bill counts as payable at a future time if it is due after a fixed period or after a certain event that will happen; a contingency does not make it a bill.

If an undated bill is payable after date or after sight, the holder may add the true date, and the bill is payable on that basis.

If a bill, acceptance, or indorsement is dated, that date is presumed to be the true date unless proved otherwise. A bill is not invalid just because it is ante-dated, post-dated, or dated on a Sunday.

This section sets how to calculate when a bill is due and payable, including days of grace, special rules for holidays and Sundays, and the meaning of “month.”

The drawer of a bill or any endorser may name a person the holder can turn to in case the bill is dishonoured, and the holder may choose whether or not to use that person.

The drawer of a bill or any indorser may add an express stipulation to limit their liability to the holder or waive some or all of the holder’s duties.

A bill is accepted when the drawee assents to the drawer’s order, and the acceptance is only valid if it is written on the bill and signed by the drawee.

A bill may be accepted before it is signed or completed, and even when overdue or previously dishonoured. If a bill payable after sight is later accepted after dishonour by non-acceptance, the holder can treat it as accepted from the first presentment date unless there is a different agreement.

An acceptance is either general or qualified.

A signed blank stamped paper, or a bill missing details, may be completed by the person in possession; if later negotiated to a holder in due course, it can be enforced by that holder.

A bill is generally incomplete and revocable until it is delivered to give it effect; for certain parties, delivery must be by or under their authority.

Liability on a bill generally matches capacity to contract, but a corporation cannot make itself liable as drawer, acceptor, or indorser unless the corporate law allows it. If an infant, minor, or incapable corporation draws or indorses a bill, the holder may receive payment and enforce the bill against other parties.

A person is not liable as drawer, indorser, or acceptor of a bill unless they signed it as such.

A forged or unauthorized signature on a bill has no legal effect, unless the party enforcing the bill is barred from raising forgery or lack of authority.

A procuration signature gives notice that the agent has limited authority, and the principal is bound only if the agent signed within actual authority.

A person who signs a bill as drawer, endorser, or acceptor is not personally liable if the signature shows they sign for a principal or in a representative role.

A bill may be treated as supported by value if there is sufficient consideration, an antecedent debt or liability, or a lien in specified cases.

An accommodation party is someone who signs a bill as drawer, acceptor, or indorser without receiving value, to lend their name to another person.

A holder is a holder in due course only if the bill was taken before it was overdue, without notice of prior dishonour, in good faith, and for value, with no notice of defects in title.

A party whose signature appears on a bill is presumed to have become a party for value, and a holder of a bill is presumed to be a holder in due course unless fraud, duress, force and fear, or illegality is shown.

This section explains when a bill is negotiated and how delivery or indorsement affects different kinds of bills.

An indorsement can operate as a negotiation only if it meets specified conditions, including being on the bill, signed, for the whole bill, and in the proper form.

If a bill is indorsed conditionally, the payer may ignore the condition, and payment to the indorsee is still valid.

A blank indorsement names no indorsee and makes the bill payable to bearer; a special indorsement names the person payable, and a holder of a blank-indorsed bill may turn it into a special indorsement.

A restrictive indorsement limits transfer of a bill and gives the indorsee payment and suing rights, unless the indorsement expressly allows further transfer.

This section says a negotiable bill stays negotiable until it is restrictively endorsed or paid/discharged, but overdue or dishonoured bills are taken subject to title defects in defined cases.

If a bill comes back to the drawer, a prior indorser, or the acceptor, that party may re-issue and negotiate it again, but cannot enforce payment against an intervening party they were previously liable to.

A holder of a bill may sue on the bill in their own name, and a holder in due course has stronger enforcement rights.

A bill must be presented for acceptance before payment in certain cases.

When a bill payable after sight is negotiated, the holder must present it for acceptance or negotiate it within a reasonable time.

The holder must present a bill for acceptance in the stated way, unless an excuse applies.

If a bill is presented for acceptance and not accepted in time, the presenter must treat it as dishonoured by non-acceptance.

If a bill is dishonoured by non-acceptance, the holder has an immediate right of recourse against the drawer and indorsers.

A holder may refuse a qualified acceptance and may treat the bill as dishonoured if an unqualified acceptance is not obtained.

A bill must be duly presented for payment, and the timing and place of presentment depend on whether it is payable on demand and on the bill’s details.

Presentment for payment is excused in some cases, but if the delay ends, presentment must be made with reasonable diligence.

A bill is dishonoured by non-payment if payment is refused or cannot be obtained on due presentment, or if presentment is excused and the bill is overdue and unpaid.

When a bill is dishonoured for non-acceptance or non-payment, notice of dishonour must be given to the drawer and each indorser.

Notice of dishonour must be given under specified rules, usually by the holder or a liable indorser, and within a reasonable time after the bill is dishonoured.

Delay in giving notice of dishonour can be excused in limited cases, and once the delay ends the notice must be given promptly. Notice can also be dispensed with in listed situations, including inability to give or deliver it after reasonable diligence or waiver.

This section says when bills are to be noted or protested after dishonour, and gives special rules for inland and foreign bills.

A holder who presents a bill for payment must show the bill to the person demanding payment and, once the bill is paid, must hand it to the payer.

A bill does not by itself transfer funds held by the drawee, and a drawee who does not accept the bill as required is not liable on it.

An acceptor of a bill must pay it as accepted and cannot deny certain facts to a holder in due course.

A drawer or indorser of a bill undertakes that the bill will be accepted and paid on proper presentment, and must compensate specified parties if the bill is dishonoured and the required dishonour steps are taken.

A person who signs a bill as neither drawer nor acceptor takes on an indorser’s liabilities to a holder in due course.

If a bill is dishonoured, the holder and certain paying parties may recover specified damages, including the bill amount, interest, and related expenses.

A bearer bill transferred by delivery without indorsement makes the transferor a “transferor by delivery,” who is not liable on the instrument.

A bill is discharged when paid in due course by or for the drawee or acceptor; special rules apply when the drawer, indorser, or party accommodated pays.

A banker who pays a demand bill in good faith and in the ordinary course of business does not have to prove that endorsements were authorized, even if they were forged.

If the acceptor of a bill is, or becomes, the holder of it at or after maturity, in their own right, the bill is discharged.

A holder may waive rights or liabilities under a bill, and a bill is discharged if the holder absolutely and unconditionally renounces rights against the acceptor at or after maturity.

A bill can be discharged if the holder or the holder’s agent intentionally cancels it or cancels a liable party’s signature, and the cancellation is apparent.

A materially altered bill is avoided unless all liable parties assented; an unknowing holder in due course may still enforce it as originally written.

A person who is not already liable on a dishonoured bill may, with the holder’s consent, accept it supra protest for honour; a valid acceptance must be written on the bill and signed.

An acceptor for honour must pay the bill on due presentment if the drawee does not pay, provided the bill was duly presented, protested for non-payment, and notice was given.

A dishonoured bill accepted for honour, or referring to a case of need, must be protested for non-payment before presentment to the acceptor for honour or referee.

A person may pay a protested bill for another party’s honour, but the payment must be supported by a notarial act of honour.

If a bill is lost before it is overdue, the holder may ask the drawer for a duplicate bill.

In a bill-related court case, the court or judge may allow the loss of the instrument to be disregarded if an indemnity acceptable to the court or judge is provided.

For a bill drawn in a set, acceptance may be written on any part but only on one part; if multiple parts are accepted or negotiated in certain ways, liability can attach on each relevant part.

This section says which law applies to different parts of a bill when the bill is connected with more than one country.

A cheque is defined as a bill of exchange drawn on a banker and payable on demand.

If a cheque is not presented within a reasonable time and the drawer suffers actual damage, the drawer is discharged to the extent of that damage, and the holder can recover that amount from the banker.

A banker’s duty and authority to pay a customer’s cheque are determined by countermand of payment and notice of the customer’s death.

A banker who takes a cheque payable to order for collection, and gives value for it or has a lien on it, gets the same rights as if the cheque had been indorsed in blank.

An unindorsed cheque or covered instrument that appears to have been paid by the drawee banker is evidence that the payee received the amount payable.

A banker who, in good faith and in the ordinary course of business, pays an unindorsed or irregularly indorsed cheque is not liable just because of the indorsement problem.

A banker who acts in good faith and without negligence is protected from liability to the true owner when collecting payment of certain instruments.

This section defines when a cheque is crossed generally or specially.

This section lets a drawer, holder, or banker cross a cheque in certain ways, and lets a holder add “not negotiable.”

A cheque crossing authorized by the Act counts as part of the cheque, and no one may obliterate it or, unless authorized by the Act, add to or alter it.

A banker must refuse payment of a cheque specially crossed to more than one banker, unless it is crossed to a banker acting as collecting agent.

A banker who pays a crossed cheque in good faith and without negligence gets the same protection as if payment had been made to the true owner; the drawer gets the same protection if the cheque has come into the payee’s hands.

If someone takes a crossed cheque marked “not negotiable,” they cannot give a better title to it than the person they got it from had.

Rules on crossed cheques also apply to other instruments covered by section 79, except cheques.

If the Government has an account with a banker, it must be treated as that banker’s customer for this Act.

The Act’s preceding provisions do not make an instrument negotiable if it was not negotiable already.

This section defines what counts as a promissory note, inland note, and foreign note.

A promissory note is not complete until it is delivered to the payee or bearer.

A promissory note can be made by two or more makers, and it can be treated as jointly liable or jointly and severally liable according to its wording.

A demand note that has been indorsed must be presented for payment within a reasonable time.

A promissory note payable at a particular place must be presented there for the maker to be liable; for an indorser, presentment for payment is necessary, and in some cases presentment at the stated place is enough.

A maker of a promissory note must pay it according to its tenor and cannot deny certain facts to a holder in due course.

Rules about bills of exchange generally apply to promissory notes, with necessary changes, but several bill rules do not apply to notes.

This provision defines when a thing counts as done in good faith: when it is done honestly, even if it was negligent.

A required signature may be made by someone else acting under authority, and a corporation may satisfy a signature requirement by using its corporate seal.

When a time limit under the Act is under three days, non-business days are not counted.

A bill or note can count as sufficiently protested if it is noted for protest before the required time ends or before the next proceeding is taken.

If a bill or note must be protested but no notary can be obtained locally, a householder or substantial resident may sign a certificate with two witnesses instead.

Rules about crossed cheques apply to a warrant for payment of dividend.

This section keeps certain existing rules applying to bills of exchange, promissory notes, and cheques, and says the Act does not disturb specified other laws and usages.