The Supreme Court has recently heard a case concerning formal requirements of a Bill of Exchange, which need to be met so as it could be deemed one.
In accordance with Section 75 of the Bill of Exchange and Cheque Act, a Bill of Exchange is to contain the following:
- A label confirming the document in question is a bill of exchange within the text thereof and expressed in the language of the document
- Unconditional pledge to repay the amount stated in the document
- The Due date term
- An entry defining the place of payment
- The name of the recipient/bearer of the payment
- The date and place of signing of the bill of exchange
- The signature of the promissor.
A bill of exchange is deemed a perfect security, which means that the rights and obligations connected with the bill relations are stipulated solely by the document and the entries in it. The necessary formal requirements are demonstrated by the fact that the bill of exchange needs to be termed one.
The Supreme Court solved a case whether a bill of exchange termed “blank bill”, i.e. one in which several data are intentionally left blank, is valid and ruled that although the term “blank bill” is not proper, it does not result in the bill being invalid on grounds of the absence of requirements stipulated by the Bill of Exchange and Cheque Act.