Acceptance may be either general or qualified. By a general acceptance, the acceptor assents without qualification to the order of the drawer . The acceptance of bill is said to be qualified, when the drawee does not accept it according to the apparent tenor of the bill but attaches some conditions or qualification which have the effect of either reducing his (acceptor’s) liability or acceptance of the liability subject to certain conditions. The holder of a bill is entitled to require an absolute and unconditional acceptance as well as to treat it as dishonoured, if it is not so accepted. However he may agree to qualified acceptance, but he does so at his own peril, since thereby he discharges all parties prior to himself, unless he has obtained their consent.
According to the Explanation to Section 86 of the Act, an acceptance to be treated as qualified.
(1) Where it is conditional, declaring the payment to be dependent on the happening of an event therein stated, accepted payable when in funds” “accepted payable on giving up bills of lading for cover per S.S. Amazon “accepted payable when a cargo consigned to me is sold”
(2) When it undertakes the payment of part only of the sum ordered to be paid, e.g., a bill drawn for Rs. 5,000 but “accepted for Rs. 4,000 only”.
(3) When, no place of payment being specified on the order, it undertakes to pay only at a specified place and not elsewhere or to pay at a place different from that specified in the bill and not elsewhere.
(4) Where it undertakes the payment at a time other than that at which under the order it would be legally due e.g., a bill drawn “payable three months after date” is accepted as “accepted, payable six months after date.”
The aforementioned list of examples is only illustrative of the different respects in which the bill may be qualified, for it is possible to qualify the acceptance of a bill in other ways as well.
(5) Drawee in case of need: When in the bill or any endorsement thereon the name of any person is entered, in addition to the drawee, to be restored to in case of need, such a person is called a drawee in case of need. In case of need means in the event of the bill being dishnoured by the drawee by non-acceptance or non-payment. The holder of the bill is at liberty to choose whether be will resort to the drawee in case of need or not.
(6) Payee: The party to whom or to whose order the amount of a bill of exchange, cheque or promissory note is payable is the payee.
(7) Delivery means transfer of possession from one person to another.
(8) Issue of negotiable instrument means its first delivery, complete in form, to a person who takes it as a holder.
A holder may become the possessor or payee of an instrument even without consideration whereas a holder in due course is one who acquires possession for consideration.
According to the Explanation to Section 86 of the Act, an acceptance to be treated as qualified.
(1) Where it is conditional, declaring the payment to be dependent on the happening of an event therein stated, accepted payable when in funds” “accepted payable on giving up bills of lading for cover per S.S. Amazon “accepted payable when a cargo consigned to me is sold”
(2) When it undertakes the payment of part only of the sum ordered to be paid, e.g., a bill drawn for Rs. 5,000 but “accepted for Rs. 4,000 only”.
(3) When, no place of payment being specified on the order, it undertakes to pay only at a specified place and not elsewhere or to pay at a place different from that specified in the bill and not elsewhere.
(4) Where it undertakes the payment at a time other than that at which under the order it would be legally due e.g., a bill drawn “payable three months after date” is accepted as “accepted, payable six months after date.”
The aforementioned list of examples is only illustrative of the different respects in which the bill may be qualified, for it is possible to qualify the acceptance of a bill in other ways as well.
(5) Drawee in case of need: When in the bill or any endorsement thereon the name of any person is entered, in addition to the drawee, to be restored to in case of need, such a person is called a drawee in case of need. In case of need means in the event of the bill being dishnoured by the drawee by non-acceptance or non-payment. The holder of the bill is at liberty to choose whether be will resort to the drawee in case of need or not.
(6) Payee: The party to whom or to whose order the amount of a bill of exchange, cheque or promissory note is payable is the payee.
(7) Delivery means transfer of possession from one person to another.
(8) Issue of negotiable instrument means its first delivery, complete in form, to a person who takes it as a holder.
A holder may become the possessor or payee of an instrument even without consideration whereas a holder in due course is one who acquires possession for consideration.
When acceptance of NI is treated as qualified.
![When acceptance of NI is treated as qualified.]()
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