RESOLUTION
CONCERNING THE ACCESSION OF THE REPUBLIC OF LITHUANIA
TO THE GENEVA CONVENTIONS ON BILLS OF EXCHANGE AND CHEQUES
The Supreme Council of the Republic of Lithuania resolved:
1. To restore the accession of the Republic of Lithuania to
the Geneva Convention Providing a Uniform Law for Bills of
Exchange and Promissory Notes signed in 1930, and to the Geneva
Convention Providing a Uniform
Law for Cheques signed in 1931.
2. To extend the validity of the Republic of Lithuania Law
on Bills of Exchange and Law on Cheques (revised editions) passed
on 1 October 1938 whose texts are presented in Appendix 1 and
Appendix 2 of this Resolution.
VYTAUTAS LANDSBERGIS
President
Supreme Council
Republic of Lithuania
Vilnius
30 June 1992
No. I-2688
APPENDIX No. 1
to the Supreme Council
of the Republic of Lithuania
Resolution No. I-2688
of 30 June 1992
LAW
ON
BILLS OF EXCHANGE AND PROMISSORY NOTES
This Law shall regulate the procedure for issuing,
guaranteeing, paying, endorsing, and using bills of exchange and
promissory notes, as well as the procedure for regulating the
claims and consequences arising therefrom.
The concept of "person" as used in this Law shall apply to
both legal and natural persons.
GENERAL PROVISIONS
Bills of exchange (drafts) and promissory notes (one-name
papers) are securities - documents the drawers of which
unconditionally obligate themselves (pledge) to directly or
indirectly pay a sum certain to the persons designated therein,
either themselves or by commissioning another persons to do so.
Persons who draw bills of exchange are commissioning a third
person to pay a sum certain to the person named on the bill of
exchange.
Makers of promissory notes are pledging to pay the sum
therein specified themselves.
PART 1
BILLS OF EXCHANGE (DRAFTS)
Chapter 1
Execution and Form of Bills of Exchange
Article 1. Execution of Bills of Exchange
Bills of exchange must contain:
1) the words "bill of exchange" in the text of the document,
in the language in which it is written;
2) an unconditional commission to pay the specified sum;
3) the name of the drawee;
4) the date of payment;
5) the place of payment;
6) instructions to whom or on whose order the sum must be
paid;
7) the place and date the bill of exchange is drawn; and
8) the signature of the drawer.
In the event that the drawer is for some reason unable to
sign the bill of exchange personally, another person may sign it
at the drawer's request. In such cases, it must be confirmed
according to the notarial procedure that the bill of exchange
was signed at the drawer's request.
Article 2. Validity of Bills of Exchange in which All
Requisites are not Written
A document which is lacking even one of the requisites
listed under Article 1, with the exception of those further
specified in this Law, shall not be enforceable as a bill of
exchange.
A bill of exchange which does not specify the date on which
it is payable shall be deemed payable at sight.
Unless a bill of exchange contains a separate inscription,
the place indicated next to the name of the drawee shall be
considered the place of payment as well as the drawee's place of
residence.
A bill of exchange which does not indicate its place of
drawing shall be considered drawn (issued) in the place which is
indicated next to the drawer's name.
Article 3. Drawing Bills of Exchange
Bills of exchange may be drawn on the order of the drawer.
Bills of exchange may be drawn on the drawer himself or on
the third person.
Article 4. The Place of Payment
A bill of exchange may be presented for payment at the place
of residence of the third person or the drawee, or at another
place.
Article 5. Interest
In bills of exchange payable at sight or within a certain
period after sight, the drawer may prescribe interest payable on
the sum of the debt stated in the document. In other bills of
exchange, records concerning interest shall be invalid.
The rate of interest must be specified in the bill of
exchange. If the above provision is not indicated, the record
concerning the payment of interest shall be invalid.
Interest shall run from the date that the bill of exchange
is issued, unless another date is specified in the bill.
Article 6. The Amount of the Bill of Exchange
If the amount of the bill of exchange written in words does
not correspond to the amount written in figures, the amount
written in words shall be valid.
If the amount on the bill of exchange is written several
times in words or in figures but the amounts are inconsistent,
the smallest amount shall be valid.
Article 7. Invalid Signatures
If a bill of exchange contains signatures of persons who may
not assume liability on a bill, forged signatures, signatures of
fictitious persons, signatures made on behalf of other persons
with a different intent, or signatures made in the name of other
persons, the validity of the other signatures shall not be
influenced thereby.
Article 8. Representative not Having the Right to Represent
Persons who sign their names on bills of exchange as
representatives of other persons but who do not have the
authorisation therefor shall become personally liable on the
bill and, upon paying the bill of exchange, shall acquire the
same rights as would have the persons they allegedly represented.
The same procedure shall be applied to representatives who exceed
their right to represent.
Article 9. Liability of the Drawer
Drawers of bills of exchange shall be liable for their
acceptance and payment. They may disclaim their liability for
the acceptance of the bill of exchange, although they may not
refuse liability for its payment. Any writing concerning refusal
of liability for the payment of a bill shall be invalid.
Article 10. Incomplete Bills of Exchange
If a bill of exchange is incomplete upon its issuance and is
later supplemented in violation of the adopted agreements, the
holder's non-compliance with said agreements shall not be deemed
a violation, unless he acquired the bill of exchange illegally,
or, while acquiring it, did not know, but could have known, that
the person from whom he acquired the bill of exchange had no
right to transfer it to another person.
Chapter 2
Endorsement (Transfer of a Bill of Exchange)
Article 11. The Procedure for Endorsement
Every bill of exchange may be transferred by endorsement
even if it does not have the words "or order" written thereon.
If the drawer of a bill of exchange has written thereon the
words "not to the order" or any other analogous words, the bill
of exchange may be endorsed only in compliance with the
conventional rules of endorsement.
A bill of exchange may be endorsed for the benefit of the
drawee, regardless of whether he did or did not accept the bill,
as well as for the benefit of the drawer or any other person who
is obligated on the bill of exchange. Said persons may further
endorse such bill of exchange.
Article 12. Ineffective Endorsement
The endorsement of a bill of exchange must be unconditional.
Any conditions which may affect the endorsement shall be
invalid. Restrictive endorsement shall be invalid.
An endorsement written on behalf of the holder shall be
equivalent to blank endorsement.
Article 13. Blank Endorsement
An endorsement must be written on the bill of exchange or on
a part thereof (a paper affixed thereto). The endorser's name
must be signed thereon.
The person in whose favour the endorsement is made does not
have to be named, or the endorsement may be made by simply
writing the endorser's name (blank endorsement). In such cases,
the endorsement, in order to be valid, shall be written on the
back of the bill of exchange or on the paper affixed thereto.
Article 14. Endorsement Rights
By endorsement, all the rights in the bill of exchange are
transferred [to the transferee]. In the case of a blank
endorsement, the owner (holder) of the bill of exchange may:
1) fill in his own or another person's name [above the
endorsement];
2) further transfer the bill of exchange to another person
by endorsing it in blank; and
3) transfer the bill of exchange to a third person without
officially registering his endorsement.
Article 15. Liability of the Endorser
The endorser shall be liable for the acceptance and payment
of the bill of exchange, unless it is written otherwise.
Endorsers may prohibit further transfers of bills of
exchange. In such cases, they shall not be liable to the persons
in whose favour further endorsement of the bill is made.
Article 16. The Owner of the Bill of Exchange
The holder of a bill of exchange shall be its rightful owner
if said person proves his right to the bill by a continuous
order of endorsements even though the last endorsement be in
blank. In this case, endorsement signatures which are crossed
out shall be deemed never to have been written. If an
endorsement of another type follows an endorsement in blank, the
person who signed the endorsement of another type shall be deemed
to have acquired the bill of exchange by an endorsement in blank.
In the event that a person in any way loses a bill of
exchange, its new owner, upon proving his right to the bill in
the manner specified in Par.1 hereof, only has to return the
bill if he acquired it by fraud or if, while acquiring it, he
did not know, but could have known, that the person who endorsed
the bill to him had no right to transfer it to another person.
Article 17. Bill Debtor's Claims
Persons against whom action on a bill is brought may not
make any claims against the owner of the bill on the basis of
personal relations between said persons and the drawer or prior
owners of the bill, unless the owner of the bill when acquiring
it acted in bad faith to the detriment of the debtor.
Article 18. The Rights of the Owners of Bills of Exchange
If the endorsement includes the phrases "for recovery of
money", "for collection", "by warrant", or other words describing
a blank endorsement, the owner shall be entitled to all the
rights incident to the bill, although he may only transfer it by
another special endorsement.
In such cases, the parties obligated on the bill of exchange
may only make claims against the owner which they would have
against the endorser.
Transfer by special endorsement shall also be enforceable
after the endorser dies or after he becomes incompetent.
Article 19. Lien
When an endorsement contains the words "for deposit", "for
security" or other analogous words establishing a lien, the owner
shall be entitled to all the rights incident to the bill of
exchange. However, an endorsement written by the owner shall be
enforceable as an endorsement made by a representative.
Persons obligated on the bill of exchange may not make
claims against the owner which are based on their personal
relations with the endorser unless the owner, upon acquiring the
bill of exchange, was guilty of actions which were to the
detriment of the debtor.
Article 20. Endorsement upon the Maturity of Bills of
Exchange
Endorsements made upon the maturity of a bill of exchange
shall have the same effects as endorsements made prior to its
maturity. However, endorsements made after a protest concerning
non-payment or upon the expiration of the established protest
term shall only be considered a blank endorsement of the bill of
exchange.
If the date of endorsement is not stated, the endorsement
shall be considered to have been made prior to the term
established for protests to be made official, unless it is
proved to the contrary.
Chapter 3
Acceptance
Article 21. Presentment for Payment
The owner or other holder of a bill of exchange may present
it for acceptance to the drawee at his residence prior to the
expiration of the period established for the payment of the
bill.
Article 22. Instructions of the Drawer and Endorser
The drawer may inscribe on each bill of exchange that
presentment of the bill for acceptance is necessary, and may
choose whether or not to specify the period of acceptance.
The drawer may interdict the acceptance of a bill of
exchange if it is not a bill of exchange payable with the third
party, or if it is payable somewhere other than the residence of
the drawer, or if it is payable within a fixed period from its
presentment.
The drawer may also establish that the bill of exchange may
not be presented for acceptance prior to the stated date.
Each endorser may indicate that a bill of exchange must be
presented for acceptance, and may decide whether or not to
specify the period of acceptance unless the drawer of the bill
of exchange stated that the bill is not subject to acceptance.
Article 23. Period for Presentment for Payment
Bills of exchange payable within a certain period from
presentment must be presented for acceptance within one year
from the date of issue.
The drawer of the bill of exchange may establish a shorter
time limit or defer presentment for acceptance. Endorsers shall
have the right to fix a shorter time limit.
Article 24. Re-Presentment for Payment
The drawee may require that the bill of exchange be
presented for a second time on the day after the first
presentment. The parties concerned may only justify non-
compliance with the above requirement by the fact that the
requirement is stated in the instrument of protest.
The owner shall not be obliged to leave the bill of exchange
presented for acceptance with the drawee.
Article 25. Execution of Acceptance
Acceptance shall be written on the bill of exchange. It
shall be denoted by the word "accepted" or any other analogous
word and shall be signed by the drawee. The mere signature of
the drawee on the face of the bill shall be considered
acceptance.
If a bill of exchange is payable within a certain period
after presentment or if it must be presented for acceptance at a
fixed date under a separate agreement, the date of acceptance
must be the day when the acceptance is actually written, unless
the owner of the bill of exchange requires that presentment be
dated. If the acceptance is not dated, the owner of the bill of
exchange, in order to preserve his rights to the endorser and
the drawer of the bill, must certify the omission by a timely
executed instrument of protest.
Article 26. Declaration of Acceptance
Acceptance shall be unconditional, although the drawee may
accept a part of the amount of the bill of exchange.
Any other alteration of the contents of the bill of exchange
made by acceptance shall be considered refusal to accept the
bill. The acceptor shall nevertheless be liable for the content
of his acceptance.
Article 27. Domiciled Bill of Exchange
When the drawer states in a bill of exchange that it is
payable somewhere other than the residence of the drawee
(domiciled bill), but does not state the place of the third
party where the bill must be paid, the drawee may specify the
said party when accepting the bill. In the event of omission of
the above statement, it shall be assumed that the acceptor is
commissioning himself to pay the bill in the place of payment.
If a bill of exchange must be paid at the residence of the
drawee, the drawee may specify any place of payment when
accepting the bill.
Article 28. Enforceability of Acceptance
By accepting a bill of exchange, the drawee is committing
himself to pay the bill upon its maturity.
Upon nonpayment, the owner, being the drawer of the bill,
shall have the right to bring an action on the bill of exchange
directly against the acceptor and to require payment of amounts
specified in Article 48 and 49 of this Law.
Article 29. Crossing Out Acceptance
If the drawee, before returning a bill of exchange, crosses
out his statement of acceptance, it shall be considered that
acceptance is refused. It shall also be considered that the
statement was crossed out before returning the bill of exchange,
unless its is proved to the contrary.
However, if the drawee gives a written notice of acceptance
to the owner of the bill of exchange or any signatory on the
bill of exchange, he shall assume obligations to them on the
terms (contents) of the bill.
Chapter 4
Guarantee of Bills of Exchange (Avail)
Article 30. The Essence of Avail
Payment of a bill of exchange may be guaranteed by avalising
the bill or a part of its amount.
The grantor of the Avail shall either be a third party or
even the person who signed the bill of exchange.
Article 31. Execution of Avail
The Avail is executed on a bill of exchange or on the paper
affixed thereto. It shall be given by writing the word "avalised"
or any analogous words, and by the signature of the guarantor
(avaliser).
The signature alone of the guarantor, with the exception of
the signature of the drawee or the drawer, on the front of the
bill of exchange shall be the aval.
When avalising, it is necessary to specify the party for
whose liability the guarantee is given. Omission of the above
statement shall signify that the guarantee is given for the
liability of the drawer.
Article 32. Liability and Rights of the Guarantor
The guarantor and the party for whose liability he
guarantees shall be jointly liable. The obligation shall be
binding also in the case when it appears ineffective for reasons
other than faulty execution.
Upon paying the bill of exchange, the guarantor shall
acquire the right of recourse to the party for whose liability
he guaranteed, and to parties who are liable on the bill to the
above party.
Chapter 5
Date of Payment
Article 33. Date of Payment of Bills of Exchange
A bill of exchange may be drawn to be paid in the following
ways:
1) upon its presentment;
2) at a stated period after presentment;
3) at a stated period from its date of drawing; or
4) at the stated date.
Bills of exchange whereon another date of payment is stated
shall not be valid.
Article 34. Bills of Exchange Payable "On Demand"
Bills of exchange payable "on demand" must be paid upon
presentment.
They must be presented within one year from the day that
they are drawn. The drawer may shorten or extend the said
period. The endorser may shorten the period.
The drawer may establish that "on demand" bills of exchange
may not be presented for payment before the stated date. In
such cases, the period of presentment shall commence from the
stated date.
Article 35. Payment at a Set Period
The date of payment of a bill payable at a set period after
its presentment shall be established in accordance with the date
it is accepted or protested.
If a bill of exchange is not protested, acceptance shall be
considered to have been declared on the last day fixed for
acceptance.
Article 36. Date of Payment
A bill of exchange payable within one or several months from
the day of its drawing or presentment shall mature on the
corresponding day of the month of payment. If the month has no
corresponding day, the date of maturity shall be the last day of
the month.
If a bill is payable within one or several full months and a
half from the date of issue or presentment, first the full
months shall be counted.
If the date of payment is fixed at the beginning, middle
(middle of January, middle of February, etc.) or end of a month,
said dates shall be on the first, fifteenth, or last day of a
month, respectively.
The words "eight days" and "fifteen days" shall establish
not the period of one or two weeks, but the full period of eight
or fifteen days, respectively. The words "half a month" shall
signify a period of fifteen days.
Article 37. Procedure for Payment
If a bill of exchange is payable at a stated date at a place
where a calendar other than the one used in the place of issue
is operative, the date of payment shall be fixed according to
the calendar used in the place of payment.
If a bill is payable at another place within a set period
after drawing and the calendar of said place differs from the
one used in the place of issue of the bill, the day of drawing
of the bill shall be adjusted to the corresponding calendar day
of the place of payment and the date of payment shall be
established in this manner.
The period for presenting the bill shall be fixed in
accordance with the rules set forth in Par.2 hereof.
The above rules shall be not apply when any writing on the
bill or the contents of the bill prescribe that other rules must
be applied
Chapter 6
Payment
Article 38. Presentment for Payment
The owner of a bill of exchange payable at a fixed date or
at a set period after its drawing or presentment must present
the bill on the day of payment or on any of the two following
days.
Article 39. Rights of the Person who Pays the Bill of
Exchange
When paying a bill of exchange, the drawee may request the
owner's signed receipt of the instrument upon its surrender.
The owner may not refuse to accept partial payment. When
making a partial payment, the drawee may request that a
corresponding inscription be made on the bill of exchange and
that he be issued a signed receipt for partial payment.
Article 40. Payment before the Stated Date
The owner of a bill of exchange may not be compelled to
receive payment before the stated date. When paying before the
stated date, the drawee shall do this at his own risk.
Upon timely payment, the drawee shall be discharged from
liability on the bill of exchange, provided that he did not act
fraudulently or in bad faith. He must check the consecutive
order of endorsements but not the signatures of the endorsers.
Article 41. Currency of the Bill of Exchange
If the currency specified on the bill of exchange is not in
circulation in the place of payment, the amount may be paid in
the currency of the place where the payment is made and at the
rate of exchange established on the day of payment. When a bill
of exchange is paid after its maturity, the owner may at his own
discretion request that payment be made in the currency of that
country according to the exchange rate as of the date fixed for
payment or of the date that the payment is made.
When establishing the exchange rate of foreign currency,
traditions of the country of payment shall be observed. However,
the drawer of the bill of exchange may establish that the
payable amount be calculated in accordance with the exchange
rate specified on the bill.
The above rules shall not be applied when the drawer
establishes that the payment must be made in the currency
specified on the bill of exchange.
If the amount is stated on the bill of exchange in the
currency whose unit has an identical name but different value in
the country of the drawer and the drawee, it shall be considered
that the currency of the country of payment is stated.
Article 42. Depositing the Amount of the Bill of Exchange
Upon failure to present a bill of exchange for payment at
the period set in Article 38, the bill debtor may deposit the
amount stated on the bill of exchange with a competent
institution at the holder's risk and expense.
Chapter 7
Demands in the Event of Non-acceptance or Nonpayment of
a Bill of Exchange
Article 43. Bringing Action
The holder of a bill of exchange may bring an action against
the endorsers, the drawer, and other obligors on the instrument:
1) on the maturity date;
2) in the event of nonpayment;
3) prior to the maturity date:
a) in the event of full or partial non-acceptance of the
bill of exchange,
b) when the drawee's solvency is questionable regardless of
his acceptance or non-acceptance of the bill, or if he suspends
his payments, even though it is not proved in court, or when
enforced recovery of a sum from his property proved ineffective,
and
c) when the solvency of the drawer of a non-acceptable bill
of exchange is questionable.
Article 44. Protest
Refusal to accept or pay a bill of exchange must be
confirmed by an official deed (instrument of protest).
In the case of non-acceptance, the protest must be
registered within the period established for a bill of exchange
to be presented for acceptance. If, in the case provided for in
Par.1 of Article 24 of this Law, a bill is presented for
acceptance on the last day, the protest may also be registered
on the following day.
In the event of nonpayment of a bill of exchange drawn to be
paid at a stated date or at a set period from the date of its
drawing or presentment, the protest must be registered within
one or two working days after the expiration of the period fixed
for payment. In the event of nonpayment of a "on demand" bill of
exchange, the protest must be registered at the date stated in
Par. 2 hereof.
Upon protesting non-acceptance, presentment of the bill of
exchange for payment or protest for nonpayment shall not be
required.
When the drawee suspends payment, regardless of whether he
accepted or refused the bill of exchange, or when enforced
recovery of a sum from his property proves ineffective, the
owner may exercise his rights only upon presenting the bill to
the drawee for payment and upon registering the protest.
If a drawee is declared insolvent, regardless of whether he
accepted the bill of exchange or not, or if the bill is not
subject to acceptance, the owner may exercise his rights upon
solely presenting the court judgment concerning the declaration
of the drawee insolvent.
Article 45. Notification in the Case of Nonacceptance
or Nonpayment of a Bill of Exchange
The owner of a bill of exchange must notify the last
endorser and the drawer of the non-acceptance or nonpayment of
the bill within four working days after it is protested; if the
words "return without charge" are inscribed on the bill of
exchange the owner must notify the above mentioned persons within
the same period after the presentment of the bill. Upon receipt
of notice, every endorser must, within two working days, notify
the previous endorser, indicating the names (surnames) and
addresses of the persons who have already been sent such notices.
The process shall continue until the drawer of the bill of
exchange is notified. Said period shall be calculated as of the
first day of the receipt of the notice.
When the drawer of a bill of exchange is notified according
to the procedure specified in Par.1 hereof, the guarantors of
the bill must be notified within the same period.
In the event that any of the endorsers fail to indicate
their address or if they write it illegibly, notification to the
endorser who is liable to the endorser in question shall
constitute sufficient notice.
Notice may be given in any manner, even by simply returning
the bill of exchange. The person charged with notification must
prove that notifications have been made by the stated date. The
time limit shall not be considered to have been violated if the
document of notice is postmarked by the fixed date.
Persons who fail to send notice within the period indicated
herein shall not lose their rights. They shall be liable for the
damage incurred through their negligence, although the amount of
compensation may not exceed the amount of the bill of exchange.
Article 46. Optional Protest
The drawer, the endorser, or the guarantor of a bill of
exchange, by writing the words "return without charge", "
protest waived", or any other analogous words on the instrument
and by signing it, may discharge the owner of the bill of
exchange from the obligation to register protest for non-
acceptance or nonpayment.
The above inscription shall not discharge the owner from
either the obligation of timely presentment of the bill of
exchange or the obligation to furnish information provided for
by law. Failure to act within the fixed time period must be
proved by the party which wishes to utilise said circumstances
in relation to the owner of the bill of exchange.
In the event that the inscription is made by the drawer of a
bill of exchange, said inscription shall be enforceable with
regard to all the signatories; if the inscription is made by the
endorser or the guarantor, it shall only be obligatory to the
person who made it. If the owner, disregarding the inscription
made by the drawer of the bill, registers protest, he shall
personally be liable for the expenses incurred thereby. If the
inscription is made by the endorser or the guarantor, the
expenses related to registering protest may be recovered from
all the signatories on the bill of exchange.
Article 47. Liability on Bills of Exchange
All persons who draw, accept endorse or avalise a bill of
exchange shall be jointly liable thereon to its owner.
The owner shall have the right to bring an action against
all the above mentioned persons, either against each of them
individually or all of them jointly, without observing the order
of liability.
Every person who signs a bill of exchange shall be entitled
to exercise the above right.
An action brought against one of the obligors shall not
preclude recovery from other persons, even if they undertook the
obligation later than the person against whom the action is
already brought.
Article 48. Right of Action
When bringing an action, the owner of a bill of exchange may
request payment of:
1) the amount of a non-accepted or unpaid bill of exchange
including interest if it was indicated;
2) interest at the rate of six percent, calculated from the
date of payment of the bill of exchange;
3) expenses related to the protest, the filing of notices,
and other expenses; and
4) late charge at the rate of three percent calculated from
the date of payment of the bill of exchange.
In the event that payment is requested prior to the stated
date, a discount shall be deducted from the amount of the bill
of exchange.
The amount of the discount shall be calculated taking into
consideration the period of time remaining until the date of
payment and the rate of discount which is valid on that day in
the place of the owner of the bill of exchange.
Article 49. Recourse Actions
Upon paying a bill of exchange, a person may demand from the
party secondarily liable thereon the recovery of:
1) the total amount paid;
2) six percent interest of the amount paid calculated from
the date of payment;
3) all incurred expenses; and
4) a late charge, calculated in the manner established in
Par.4 of Article 48 of this Law.
Article 50. The Rights of the Person Paying the Bill of
Exchange
Every obligor against whom an action is or may be brought
shall have the right to request the surrender of the paid bill
with protest and signed receipt.
Upon paying a bill of exchange, every endorser may cross out
his own endorsements as well as those subsequently written.
Article 51. Rights upon Payment of the Unaccepted Amount
of a Bill of Exchange
In the event that a bill of exchange is only partially
accepted, the person who pays the unaccepted (remaining) amount
may request that a notice of payment thereof be recorded on the
instrument and a corresponding receipt be issued. In addition,
the owner must issue the person a certified copy of the bill of
exchange and the instrument of protest so that the payer may, in
his turn, bring an action against the persons secondarily liable
on the bill of exchange.
Article 52. Redraft
Unless it has been agreed otherwise, every person who has
the right to bring an action may receive the amount by drawing a
redraft on one of his previous endorsers whose bill shall be
payable "on demand" at the place of the person.
In addition to the amounts specified in Articles 48 and 49,
the charge payable to the bill broker for mediation and the
amount of the stamp duty on bills of exchange (the price of the
draft form) must be stated on the redraft.
If a redraft is drawn by an endorser, its amount shall be
established according to the rate of exchange of the "on demand"
bill of exchange drawn in the place where the drawer of the
redraft has permanent place of residence.
Article 53. Loss of Rights upon Violation of the Time Limit
The owner of a bill of exchange shall lose his rights to the
drawer, endorsers, and other obligors on the bill with the
exception of the acceptor, if he violates the time limit
concerning:
1) presentment of a bill of exchange payable "on demand" or
at a stated period after its presentment;
2) registration of protest for non-acceptance or non-
payment; or
3) presentment for payment if the words "return without
charge" are on the bill of exchange.
Upon failure to present a bill of exchange for acceptance at
the date stated by the drawer, the owner shall lose the rights
incident to both nonpayment and non-acceptance, unless it is
obvious from the notification on the bill of exchange that the
drawer only wished to evade responsibility for the acceptance of
the instrument.
If the time for the presentment of the bill of exchange is
stated in the endorsement, only the endorser may make use
thereof.
Article 54. Force Majeure
If, by reason of force majeure (the legal provisions of a
state or a natural disaster), a bill of exchange cannot be
timely presented for payment or if protest cannot be timely
registered, the time period fixed therefor shall be extended.
The holder must, without delay, notify the endorser of the
force majeure, indicate on the bill or on a part thereof (a
paper affixed thereto) that the endorser was notified, state the
date, and sign it. Further actions shall be in correspondence
with the procedure set forth in Article 45.
When handicaps specified in Par.1 hereof are eliminated, the
owner must, without delay, present the bill of exchange for
acceptance or payment, and, when necessary, must register
protest.
If said handicaps continue to exist for more than thirty
days from the date of payment, an action may be brought without
presenting the bill of exchange for payment and without
registering protest.
In the case of bills of exchange payable "on demand" or at
stated date after presentment, the thirty-day period shall be
calculated from the day when the owner notifies the endorser of
the force majeure. Such notice may also be given prior to the
expiration of the term fixed for the presentment of the
instrument. In the case of bills of exchange payable at a stated
date after presentment, the period fixed for presentment as
stated on the bill shall be added to the thirty-day period.
Circumstances which only handicap the owner or the person
whom the owner charges to present the bill of exchange or
register protest shall not be considered force majeure.
Chapter 8
Agency
1.General Provisions
Article 55. Obligations of the Third Party to the Bill
of Exchange
The drawer, endorser, or guarantor may name the person
(agent) who, as necessary, would accept or pay the bill of
exchange.
Under the following terms, bills of exchange may be accepted
or paid by the person who represents any of the debtors liable
on the instrument in reverse order.
The third person, or even the drawee or any other person who
is obligated on the bill of exchange with the exception of the
acceptor, may be the agent.
The agent must, within two working days, notify the person
whom he represents that he is acting as an agent. Failure to
give timely notice shall make the agent liable for damage
incurred due to his negligence, although the amount of the
payable compensation may not exceed the amount of the bill of
exchange.
2. Acceptance by Agent
Article 56. The Agent's Acceptance
The agent may accept a bill of exchange in all cases wherein
the owner of the bill of exchange which is subject to acceptance
has the right to bring a recourse action prior to the expiration
of the payment period of the bill of exchange.
If the agent who, as necessary, may accept or pay the bill
at the place of domicile is stated on the bill of exchange, the
owner may, prior to the expiration of the payment period of the
instrument, exercise the right of recourse against the person
who named the agent and against the subsequent signatories of
the statement, provided that the owner presented the bill of
exchange to the agent and the latter person's refusal to accept
the instrument is registered in the instrument of protest.
In other cases, the owner may refuse to accept the agent's
acceptance. However, if the owner recognises such acceptance, he
shall lose the right of recourse to which he was entitled prior
to the expiration of the payment period of the bill of exchange
against the person on whose behalf the agent made acceptance and
to the subsequent endorsers.
Article 57. Execution of Acceptance
The agent shall write his acceptance on the bill of exchange
and shall sign thereunder, naming the person on whose behalf he
accepts. If the person is not named, the bill of exchange shall
be deemed accepted on behalf of the drawer.
Article 58. Obligations of the Acceptor
The agent-acceptor shall be obligated to the owner of the
bill of exchange for whom he acted as an agent and to the
endorsers who signed after him on the same grounds as the person
who authorised him.
Regardless of the fact that the bill of exchange is accepted
by an agent, the person in whose name the bill of exchange was
accepted as well as the previous endorsers of the owner of the
instrument may, upon paying the amounts set forth in Article 48,
request the return of the bill of exchange together with the
instrument of protest and a receipt for payment.
3. Mediated Payment
Article 59. Possibilities of Payment
Payment of bills of exchange may be done through the
mediation of an agent in all cases wherein the owner has the
right to bring a recourse action after or before the maturity
date.
In this manner, all of the amount due to be paid by the
person on whose behalf the payment thereof is made shall be
paid.
The latest date of payment shall be the following day after
the expiry of the period fixed for the registration of protest.
Article 60. Presentment for Payment and Protest
If a bill of exchange is accepted by agents whose permanent
place of residence and the domicile coincide, or if it is the
place of residence of other persons named on the bill of
exchange as persons obliged to pay when necessary reside in the
same place, the owner must present the bill of exchange to all
the said persons and, when necessary, register protest for non-
payment no later than the day following the permit of
registration of protest.
If protest is not registered within the above stated period,
the person who named the agent liable to make payment when
necessary, or the person on whose behalf acceptance was made, as
well as the subsequent endorsers shall be discharged of liability
on the bill of exchange.
Article 61. Refusal to Accept the Amount Paid
Owners who refuse to accept payment made through the
mediation of an agent shall lose the right of recourse against
the persons who would have been discharged of liability.
Article 62. Confirmation of Payment
Payment made by an agent must be stated on the bill of
exchange, naming the person on whose behalf it was made. If the
person is not named, payment shall be deemed made on behalf of
the drawer.
The bill of exchange, as well as the instrument of protest
if it was registered, must be surrendered to the agent who made
the payment.
Article 63. The Rights of Agents
Agents who make the payment of bills of exchange shall
acquire the rights incident to the instrument against the person
on whose behalf the payment was made and against the persons who
are liable on the bill of exchange to the said person. However,
the agent may not further endorse the bill of exchange.
The endorsers who signed after the person on whose behalf
the payment of the bill of exchange was made shall be discharged
of liability.
If several persons simultaneously offer to act as agents in
making the payment of a bill of exchange, priority shall be
given to the person whose payment would discharge the greatest
number of people of liability. Agents who knowingly violate the
rule shall lose the right of recourse against the persons who
would be discharged of liability.
Chapter 9
Copies and Duplicates of Bills of Exchange
1. The Number of Copies
Article 64. Identical Copies of Bills of Exchange
Bills of exchange may be drawn up in several identical
copies.
Each of the copies must be numbered on the face of the bill
of exchange;
if the number is missing, each copy shall be considered a
separate bill of exchange.
If it is not stated on the bill of exchange that it is
issued as a single bill, the owner may request that the bill of
exchange be issued in several copies. The owner must request
this of the endorser. The procedure shall be continued until,
according to the ranking order of liability, the drawer of the
bill of exchange is reached. The endorsers must repeatedly sign
their endorsements on the new copies of the bill of exchange.
Article 65. Payment of One Copy
Payment of one copy of a bill of exchange shall discharge
the payment of others even when it is not established that upon
the payment of one copy the other copies become void. However,
the drawee shall still be liable for each of the unreturned
copies which he accepted.
An endorser who has given copies of a bill of exchange to
various persons, as well as the subsequent endorsers, shall be
liable for all unreturned copies bearing their signatures.
Article 66. Acceptance
A person who presents a single copy of a bill of exchange
for acceptance must name the person who has that copy in the
other copies. The named person must give the copy to the lawful
holder of another copy.
If the person refuses to do this, the holder of the bill of
exchange may exercise the right of recourse only upon confirming
by the instrument of protest that:
1) the copy of the bill of exchange which was sent for
acceptance was not returned upon his request; and
2) another copy could not be accepted or paid.
2. Duplicates
Article 67. The Right to Have a Duplicate of a Bill of
Exchange
Every owner of a bill of exchange shall have the right to
duplicate it.
Duplicates must be completely identical to the original,
with endorsements and other writings contained thereon. It must
be specified on the duplicate where it ends.
A duplicate may be endorsed and avalised in the same manner
and with the same ensuing consequences as the original.
Article 68. Duties of Persons Holding Original Copies of
Bills of Exchange
The person holding the original copy of a bill of exchange
must be named on the duplicate. Said person must give the above
mentioned document to the lawful holder of the duplicate.
Holders of bills of exchange who refuse to do this may bring
an action against the persons who endorsed or avalised the copy
of the bill of exchange upon confirming by the instrument of
protest that the first of exchange was not given upon his
request.
Chapter 10
Alterations
Article 69. Responsibility upon Altering the Contents of
the Text of Bills of Exchange
Upon altering the content of the text of bills of exchange,
the subsequent signatories shall be liable on the content of the
altered text, while persons who signed prior to the alteration -
on the content of the original text.
Chapter 11
Statute of Repose
Article 70. Action on a Bill
All actions on bills of exchange may be brought against the
acceptor within three years from the maturity date.
The owner of a bill of exchange may bring an action against
the endorsers and the drawee within one of year of the day of
protest registered within the established period; if the bill of
exchange contains the phrase "return without charge" - within
one year of maturity date.
Endorsers may bring actions against each other and against
the drawer within six months of the day when the endorser makes
payment of the bill of exchange, or of the day when an action is
brought against him.
Article 71. Termination of the Statute of Repose
The statute of repose may never be suspended, although it
shall be terminated in the cases provided by law. Only the
person against whom the statute of repose is terminated shall be
entitled to the right of action.
Chapter 12
General Provisions
Article 72. Holidays and Days Off
Payment of bills of exchange whose date of maturity falls on
a lawfully established day off may only be requested on the
first following working day. All other actions concerning bills
of exchange, when taken separately, presentment for acceptance
and for registering protest, may only be executed on working
days.
If any actions must be performed within a certain period the
last day whereof is a lawfully established day off, the time
limit therefor shall be extended until the next working day.
Days off falling in between shall be included within the period.
Article 73. Setting the Time Period
The first days shall not be included in the time periods
provided for in this Law or stated on the bills of exchange.
Article 74. Grace Period
Neither law-established not court-ordered grace periods
shall be allowed.
PART 2
PROMISSORY NOTES
Article 75. Execution of Promissory Notes
Promissory notes must contain:
1) the words "promissory note" in the text of the document
in the language in which it is written;
2) an unconditional commission to pay the specified amount;
3) the date of payment;
4) the place of payment;
5) instructions to whom or on whose order the amount must be
paid;
6) the place and date the promissory note is drawn; and
7) the signature of the maker.
In the event that the maker is for some reason unable to
sign the promissory note personally, another person may sign it
at the maker's request. In such cases, it must be confirmed
according to the notarial procedure that the promissory note was
signed at the maker's request.
Article 76. Validity of Promissory Notes Which do not
Indicate All Requisites in Writing
A document which is lacking even one of the requisites
listed in Article 75, with the exception of those further
specified in this Law, shall not be enforceable as a promissory
note.
A promissory note which does not specify the date on which
it is payable shall be deemed payable at sight.
Unless a promissory note contains a separate inscription,
the place of its drawing shall be considered the place of
payment as well as the maker's place of residence.
A promissory note which does not indicate its place of
drawing shall be considered to have been drawn in the place
which is indicated next to the maker's name.
Article 77. Provisions Applied to Promissory Notes
The following provisions applied to bills of exchange shall
also apply to promissory notes as being in conformity with their
nature:
1) provisions concerning endorsement (Articles 11-20);
2) provisions concerning the payment period (Articles 33-
37);
3) provisions concerning payment (Articles 38-42);
4) provisions concerning action in case of non-acceptance or
non-payment (Articles 43-50, 52-54);
5) provisions concerning the procedure for mediated payment
(Articles 55, 59-63);
6) Provisions concerning copies (Articles 67 and 68);
7) provisions concerning text alteration (Article 69);
8) provisions concerning statute of repose (Articles 70 and
71); and
9) provisions concerning non-working days and the setting of
time periods (Articles 72, 73, and 74).
Furthermore, provisions concerning the aval (Articles 30-32)
shall also apply to promissory notes. In the case provided for
in the last paragraph of Article 31, when the guarantor does not
to specify the party for whose liability the guarantee is given,
the guarantee shall be considered given for the liability of the
maker of the promissory note.
Article 78. Liability of Makers of Promissory Notes
The maker of a promissory note shall be jointly liable with
the acceptor of the bill of exchange.
Promissory notes payable within a stated period after
presentment, according to the term provided for in Article 23,
must be presented to the maker for endorsement. The period
within which payment must be made after presentment shall
commence on the day of endorsement. The maker's refusal to
endorse and state the required date shall be confirmed by the
instrument of protest (Article 25) from the date of which the
time period specified in the second sentence hereof shall be
calculated.
APPENDIX No. 2
to the Supreme Council
of the Republic of Lithuania
Resolution No. I-2688
of 30 June 1992
LAW ON CHEQUES
This Law shall regulate the procedure for issuing,
enforcing, endorsing, guaranteeing, and paying (honouring)
cheques, as well as the procedure for regulating the claims and
consequences arising therefrom.
The concept of "person" as used in this Law shall apply
to both legal and natural persons.
Chapter 1
The Cheque, its Form and Drawing
Article 1. The Conception of a Cheque and its Contents
A cheque is a security - an order drawn according to a
certain legal form drawn on the instruction of a bank to
unconditionally pay a sum of money.
In accordance with the legal form, a cheque must include:
1) the word "cheque" in the text of the document, in the
language in which the document is written;
2) an unconditional commission to pay the specified sum;
3) the name of the drawee;
4) the place of payment;
5) the place and date that the cheque is drawn; and
6) the signature of the drawer of the cheque.
Article 2. Place of Drawing and Payment of a Cheque
A document which is lacking even one of the requisites
listed under Article 1, with the exception of those further
specified in this Law, shall not have the power of a cheque.
Unless it is separately specified, the place indicated next
to the name of the drawee shall be considered the place of
payment. If several places are specified next to the name of the
drawee, the cheque shall be payable at the first of the stated
places.
If these or any other directives are not indicated, the
cheque shall be payable at the place where the drawee's
principal office is located.
A cheque which does not indicate its place of drawing shall
be considered to have been signed in the place which is
indicated next to the drawer's name.
Article 3. Cheques Drawn only to Banks
A cheque may be drawn only to a bank wherein the drawer has
a deposit of funds which he or she is entitled to manage by a
cheque according to the general procedure.
A document not drawn to a bank shall not be considered a
cheque even though it contains the name of a cheque.
Article 4. Acceptance of a Cheque
A cheque may not be accepted. Inscriptions on cheques
concerning acceptance shall be invalid.
Article 5. Payee of the Amount of a Cheque
A cheque may be drawn for payment to:
1) a certain person with or without the phrase "pay to the
order of";
2) a certain person with the phrase " not to the order of"
or an analogous phrase; and
3) the holder.
A cheque drawn in favour of a certain person with the
inscription "or bearer" or another analogous inscription shall
be enforceable as a bearer cheque.
A cheque wherein the payee is not named shall be considered
a bearer cheque.
Article 6. To whom a Cheque may be Drawn
A cheque may be drawn by the order of the drawer himself. It
may not be drawn on the account of a third party.
A cheque may not be drawn to the drawer himself, with the
exception of cases when the cheque is drawn from one institution
of the drawer on the other. A cheque of this type may not be
drawn in favour of the holder.
Article 7. Interest on the Amount of a Cheque
Any inscription on a cheque concerning the payment of
interest shall be invalid.
Article 8. The Place of Payment of a Cheque
A cheque may be presented for payment to a third party at
the drawee's place of residence or at any other place, but only
if the third party is a bank.
Article 9. The Amount of a Cheque Written in Words and
Figures
If the amount of a cheque written in words does not
correspond to the amount written in figures, the amount written
in words shall be valid.
If the amount is written on a cheque several times in words
or in figures but the amounts are inconsistent, the smallest
amount shall be valid.
Article 10. Signatures on a Cheque
If a cheque contains signatures of persons who may not
assume liability on a cheque, forged signatures, signatures of
fictitious persons, or signatures of persons who are not
connected with the persons who signed the cheque or with persons
in whose name it was signed, the obligations and rights of the
other signatories shall not be influenced thereby.
Article 11. Authorised Persons of the Drawer of a Cheque
A person who signs a cheque as a person authorised by
another person but who was not authorised therefor, shall become
personally liable on the cheque and, upon payment thereof, shall
acquire the same rights as the person he or she allegedly
represented would have. The same procedure shall be applied to
representatives who exceeds their powers.
Article 12. Responsibility for Payment of the Amount of
a Cheque
The drawer shall be responsible for payment of the amount of
a cheque. Any inscription whereby the drawer declines
responsibility shall be considered invalid.
Article 13. Incomplete Cheques
If a cheque is incomplete upon its issuance and is later
supplemented in violation of the adopted agreements, the
holder's rights may not be denied by reason of non-compliance
with said agreements, unless the holder acquired the cheque
illegally, or, while acquiring it, did not know, but could have
known, that the former owner of the cheque had no right to
transfer it to another person.
Chapter 2
Endorsement (Transfer) of a Cheque
Article 14. Endorsement
A cheque drawn in favour of a certain person with or without
the directive "to the order of" written thereon may be
transferred by endorsement.
A cheque drawn for payment to a certain person with the
phrase "not to the order" or any analogous phrase, may be
endorsed only in compliance with the rules of execution of
conventional endorsement.
A cheque may even be endorsed for the benefit of the drawer
or any other obligor. Said persons may further endorse such
cheques.
Article 15. Effect of Endorsement
When endorsing a cheque, no conditions may be inscribed
therein. Any conditions which may affect the endorsement shall
be invalid.
Restrictive endorsement shall be invalid. The drawee's
endorsement shall also be invalid.
An endorsement written on behalf of the holder shall be
equivalent to blank endorsement.
An endorsement written on behalf of the drawee shall only be
valid as a receipt, with the exception of cases when the drawee
has several institutions and when the cheque is endorsed to an
institution other than the one on which the cheque was drawn.
Article 16. Execution of Endorsement
An endorsement must be written on the cheque or on a part
thereof (a paper affixed thereto). The endorser's name must be
signed thereon.
The drawee does not have to be named on the endorsement, or
the endorsement may just have the endorser's signature (blank
endorsement). In the latter case, the endorsement must be
written on the back of the cheque or on the front sheet in order
to be effective.
Article 17. Endorsement Rights
By endorsement, all rights of the cheque are transferred [to
the transferee].
In the event of blank endorsement, the holder may:
1) fill in his or another person's name;
2) further endorse the cheque by blank endorsement or
transfer it to a specific person; and
3) transfer the cheque to a third person without filling in
the blank endorsement and without endorsing the cheque.
Article 18. Liability of the Endorser
The endorser shall be liable for the payment of the cheque
unless it is written otherwise. In such an event, the endorser
shall be liable to the persons to whom the cheque is further
endorsed.
Article 19. The Owner of an Endorsed Cheque
The holder of a cheque which is being endorsed shall be its
rightful owner if said person proves his right to the cheque by
a continuous order of endorsements, even though the last
endorsement is blank. In this case, endorsement signatures
which are crossed out shall be considered never to have been
written. If an endorsement of another type follows an
endorsement in blank, the person who signed the other type of
endorsement shall be deemed to have acquired the cheque by blank
endorsement.
Article 20. Endorser's Liability by Order of Recourse
The endorser of a cheque drawn "to bearer" shall become
liable by order of recourse, although the document shall not
become an order cheque.
Article 21. Loss of a Cheque
If a person for any reason loses a cheque, regardless of
whether it is a bearer cheque or an endorsed cheque, its new
owner, upon proving his right in the manner established in
Article 19, must return the cheque only if he acquired it by
fraud or if he did not know, but could have known, that the
former owner of the cheque had no right to transfer it to
another person.
Article 22. Claims against a Cheque
Persons against whom action on a cheque are brought may not
make any claims against the owner of the cheque on the basis of
personal relations between said persons and the drawer or prior
owners of the cheque, unless the owner of the cheque acted in
bad faith to the detriment of the debtor when acquiring it.
Article 23. Restrictions of Endorsement
If an endorsement includes the phrases "for recovery of
money", "for collection", "by commission", or other words
describing a payment order, the owner shall be entitled to all
the rights incident to the cheque, although he may only endorse
it as a representative.
In such cases, the parties obligated on the cheque may only
make claims against the owner which they would have against the
endorser.
Endorsement by a representative shall also be enforceable
after the principal dies or becomes incompetent.
Article 24. Date of Endorsement
Endorsement made after protest or after similar actions, or
upon maturity, shall be considered negotiation of a cheque.
If the date of endorsement is not stated, it shall be
considered to have been made prior to protest or any other
similar action, or prior to the date stated in Par.1 hereof,
unless it is proved to the contrary.
Chapter 3
Guarantee of Cheques (Aval)
Article 25. Avalising the Amount of the Cheque or a Part
thereof
Payment of a cheque may be guaranteed by avalising the
cheque or a part of its amount.
The aval shall be executed either by a signature of the
third person or even the person who signed the cheque, with the
exception of the drawee.
Article 26. Execution of Aval
The aval is written on a cheque or on the paper affixed
thereto. It shall be given by writing the word "avalised" or any
analogous words, and by the signature of the guarantor
(avaliser). The person who signs on the front of the cheque shall
be considered the guarantor, provided that he is not the drawer
of the cheque.
When avalising, it is necessary to specify the party for
whose liability the guarantee is given. Omission of the above
statement shall signify that the guarantee is given for the
liability of the drawer.
Article 27. Liability and Rights of the Guarantor
The guarantor and the party for whose liability he
guarantees shall be jointly liable. The obligation shall be
binding also in the case when it appears ineffective for reasons
other than faulty execution.
Upon paying the cheque, the guarantor shall acquire the
rights to the party for whose liability he guaranteed, and to
parties who are liable on the cheque to the above party in
accordance with the Law on Cheques.
Chapter 4
Presentment and Payment of Cheques
Article 28. Period of Payment
A cheque shall be payable on presentment. Any inscription to
the contrary shall be invalid.
A cheque presented for payment prior to the day stated as
the day of drawing shall be payable on the day of presentment.
Article 29. Domicile
A cheque drawn and payable in one and the same country must
be presented for payment within eight days.
A cheque payable in the country other than the country of
drawing must be presented within twenty days if the place of
drawing and payment of the cheque is in the same part of the
world, and within seventy days if the places of drawing and
payment are in different parts of the world. But cheques drawn
in any European state and payable in any Mediterranean state or
vice versa shall be considered drawn and payable in one and the
same part of the world.
The day of drawing of the cheque shall be included within
the above specified period.
Article 30. Payment of Cheques in the Cases when Different
Calendars are Used
When a cheque is drawn in one place and payable in another
place where a calendar other than the one used in the place of
drawing is operative, the date of drawing shall be fixed
according to the calendar used in the place of payment.
Article 31. Clearing House
The presentment of a cheque to the clearing house or to any
other analogous institution shall be equated to presentment for
payment.
The Government must establish which institutions shall be
considered clearing houses and under what conditions cheques may
be presented to them.
Article 32. Countermanding a Cheque
The countermand of a cheque shall become effective only upon
its presentment date.
In the event that a cheque is not countermanded, the drawee
may also pay it after its presentment date.
Article 34. Execution of Payment
Upon paying a cheque, the drawee bank may request that the
delivered cheque contain the holder's receipt.
The holder may not refuse to accept partial payment of the
cheque.
Upon paying a part of the amount of the cheque, the drawee
bank may request that the paid amount be stated on the cheque
and that he be issued a corresponding receipt.
Article 35. Payment of an Endorsed Cheque
The drawee who pays an endorsed cheque must check the
consecutive order of endorsements but not the genuineness of the
signatures of endorsers.
Article 36. Payment of a Cheque when the Amount is Stated
in a Foreign Currency
If the currency specified on the cheque is not in
circulation in the place of payment, the amount may be paid in
the currency of the state where the payment is made and at the
exchange rate established on the day the payment is made. If a
cheque was not paid upon its presentment, the holder may at his
discretion request that the amount of the cheque be paid in the
currency of the state at the exchange rate established on the
day of presentment or payment.
When establishing the exchange rate of foreign currency,
traditions of the country of payment shall be observed. However,
the drawer of the cheque may establish that the payable amount be
calculated in accordance with the exchange rate specified on the
cheque.
The above rules shall not be applied when the drawer
establishes that the payment must be made in the currency
specified on the cheque (note concerning effective payment in
foreign currency).
If the amount is stated on the cheque in the currency whose
unit has an identical name but different value in the country of
the drawer and the drawee, it shall be considered that the
currency of the country of payment is stated.
Chapter 5
Crossed and 'A/C payee' Cheques
Article 37. Characteristics of a Cheque
With the aim of restricting the possibilities of using a
cheque, its drawer or bearer may cross it with two parallel
lines across the face of the cheque.
In the event that there is no inscription between the lines
or if there is only the word "bank" without its concrete name,
or some other analogous inscription, the cheque shall be
considered a generally crossed cheque. If the name of the banking
institution is inscribed between the parallel lines, the cheque
shall be considered a specially crossed cheque.
A generally crossed cheque may be transformed into a
specially crossed cheque. A specially crossed cheque may not be
in any way transformed into a generally crossed cheque.
The crossing out of the parallel lines or of the name of the
banking institution shall be considered invalid.
Article 38. Payment of a Crossed Cheque
The drawee may pay the amount of a generally crossed cheque
only to the bank or to the customer of the drawee.
The drawee may pay the amount of a specially crossed cheque
only to the bank specified on the cheque, or, in the event that
the specified bank is itself the drawee, only to its customer.
However, such bank may collect the cheque in another bank.
The bank may accept a crossed cheque only from its customer
or from another bank. It may collect the cheque only on behalf
of the said persons.
The drawee may pay the amount of a specially crossed cheque
wherein the names of no more than two banks are filled in only
provided that one of the specified banks directs that the cheque
be collected through the clearing house system.
The drawee or the bank who acts in violation of the above
specified provisions shall be liable for the losses by the
amount not exceeding the amount of the cheque.
Article 39. 'A/C payee' Cheques
The drawer of the cheque as well as its holder may interdict
the payment of the amount of the cheque in cash by writing
across the face of the cheque the restrictive order 'A/C payee'
or any other analogous phrase.
The amount of such cheque shall be written off the drawer's
account and deposited into the account of the presenter of the
cheque. Such settlement shall be equated to the payment of the
cheque.
The crossing out of the words 'A/C payee' shall have no
effect on the validity of the cheque.
The drawee who disregards the above provisions shall be
liable for the losses by the amount not exceeding the amount of
the cheque.
Chapter 6
Claims Concerning the Non-payment of a Cheque
Article 40. Grounds for Filing Claims Concerning the Non-
payment of a Cheque
The holder may file a claim against the endorsers, the
drawer, and to other persons obligated on the cheque if the
timely presented cheque was not paid and if the refusal to pay
is certified by:
1) an official act (protest), or
2) the drawee's statement dated and inscribed on the cheque
whereon the date of presentment is stated, or
3) a dated statement of the clearing house containing the
notice to the effect that the cheque was presented at the due
date but was not paid.
Article 41. Protest of a Cheque
Protest or an analogous instrument must be registered within
the period established for a cheque to be presented.
If a cheque is presented on the last day of the established
period, the protest or an analogous instrument may be registered
on the following working day after the expiration of the period.
Article 42. Notification in the Case of Nonpayment of a
Cheque
The holder of a cheque must notify his/her endorser and the
drawer of the nonpayment of the cheque within four working days
after it is protested or after any other analogous deed is
registered or, if the words "return without charge" are inscribed
on the cheque, within the same period from the day of presentment
of the cheque. Upon receipt of notice, every endorser must,
within two working days, notify the previous endorser, indicating
the names (surnames) and addresses of the persons who have
already sent such notices. The process shall continue until the
drawer of the cheque is notified. Said period shall be calculated
as of the first day of the receipt of the notice.
When the drawer of a bill of exchange is notified according
to the procedure specified above, the guarantor of the cheque
must be notified within the same period.
In the event that any of the endorsers fail to indicate
their address or if they write it illegibly, notification to the
endorser who is liable to the endorser in question shall
constitute sufficient notice.
Notice may be given in any manner, even by simply returning
the cheque. The person charged with notification must prove that
notifications have been made by the stated date. The time limit
shall not be considered to have been violated if the document of
notice is postmarked by the fixed date.
Persons who fail to send notice within the period indicated
herein shall not lose their rights. They shall be liable for the
damage incurred through their negligence, although the amount of
compensation may not exceed the amount of the cheque.
Article 43. Optional Protest
The drawer, the endorser, or the guarantor of a cheque, by
writing the words "return without charge", " protest waived", or
any other analogous words on the instrument and by signing it,
may discharge the owner of the bill of exchange from the
obligation to register protest or from any other analogous
certification of his rights to raise demands.
The above inscription shall not discharge the holder from
either the obligation of timely presentment of the cheque or the
obligation to furnish information provided for by law. Failure to
act within the fixed time period must be proved by the party
which wishes to utilise said circumstances in relation to the
holder of the cheque.
In the event that the inscription is made by the drawer of a
cheque, said inscription shall be enforceable with regard to all
the signatories; if the inscription is made by the endorser or
the guarantor, it shall only be obligatory to the person who
made it. If the holder, disregarding the inscription made by the
drawer of the cheque, registers protest or any other analogous
deed, he shall personally be liable for the expenses incurred
thereby. If the inscription is made by the endorser or the
guarantor, the expenses related to registering protest or any
other analogous deed may be recovered from all the signatories.e.
Article 44. Liability on for the Payment of a Cheque
All persons obligated on a cheque shall be jointly liable
thereon to its holder. The holder shall have the right to bring
an action either against all the above mentioned persons, or
against one of them individually or several of them jointly,
without observing the order of liability.
Every signatory who pays the cheque shall be entitled to
exercise the above right.
An action brought against one of the obligors shall not
preclude recovery from other persons, even if they undertook the
obligation later than the person against whom the action is
already brought.
Article 45. Action on a Cheque
When bringing an action, the holder of a cheque may request
the payment of:
1) the unpaid amount of a cheque;
2) interest at the rate of six percent, calculated from the
date of presentment of the cheque;
3) expenses related to the protest or analogous
certification, the filing of notices and other expenses; and
4) commission at the rate of 1/3 percent from the amount of
the cheque.
Article 46. Recourse Actions
Upon paying on a cheque, a person may demand from the party
secondarily liable thereon the recovery of:
1) the total amount paid;
2) six percent interest of the amount paid calculated from
the date of payment;
3) all incurred expenses; and
4) commission, calculated in the manner established in Par.4
of Article 45 of this Law.
Article 47. The Rights of the Person Paying on the Cheque
Every obligor against whom an action is or may be brought
shall have the right to request, upon paying on the cheque, the
surrender of the paid cheque with protest or any other analogous
certification and a signed receipt.
Upon paying on a cheque, every endorser may cross out his
own endorsements as well as those subsequently written.
Article 48. Force Majeure
If, by reason of force majeure (the legal provisions of a
state or a natural disaster), a cheque cannot be timely presented
for payment or if protest or any other analogous certification
cannot be timely registered, the time period fixed therefor
shall be extended.
The holder must, without delay, notify the endorser of the
force majeure specified in Par.1 hereof and indicate on the
cheque or on a part thereof (a paper affixed thereto) that the
endorser was notified, state the date, and sign it. Further
actions shall be in correspondence with the procedure set forth
in Article 42.
When handicaps specified in Par.1 hereof are eliminated, the
holder must, without delay, present the cheque for payment, and,
when necessary, must register protest or any other analogous
certification.
If said handicaps continue to exist for more than fifteen
days from the date when the holder notified his endorser prior
to the date of presentment of the cheque, an action may be
brought without registering protest or any other analogous
certification.
Circumstances which only handicap the holder or the person
whom the holder charges to present the cheque or register
protest or any other analogous certification shall not be
considered force majeure.
Chapter 7
Copies of Cheques
Article 49. Number of Copies of a Cheque
Every cheque, with the exception of bearer cheques, drawn in
one country and payable in another country, or drawn and payable
in one and the same country may be drawn in several identical
copies. In the event that a cheque is drawn in several copies,
each of the copies be numbered on the face of the cheque. If the
number is missing, each copy shall be considered a separate
cheque.
Article 50. Payment of one Copy of the Cheque
Payment of one copy of the cheque shall exempt from payment
of other copies even in the cases where it has not been
established that after the payment of one copy of the cheque
other copies thereof become canceled.
Chapter 8
Alterations on the Face of the Cheque
Article 51. Signatures upon Altering the Text of the
Cheque
Persons who sign upon altering the text of the cheque shall
be liable on the contents of the altered text. Persons who
signed prior to the alteration shall be liable on the original
contents of the text.
Chapter 9
Statute of Repose
Article 52. Time Period for Bringing Actions
The period of time within which for the holder of the cheque
may bring an action against the endorsers, the drawer and other
obligors on the cheque shall expire after six months from the
date of the presentment of the cheque.
The period of time during which the persons who assumed the
liability on the payment of the cheque may bring actions against
one another shall expire within six months from the day of
payment of the cheque by the person who is obligor on the cheque
or from the day an action is brought against said person.
Article 53. Termination of the Statute of Repose
The statute of repose shall be terminated in the cases
provided by law, although it may never be suspended.
Only the person against whom the statute of repose is
terminated shall be entitled to the right of action.
Chapter 10
General Regulations
Article 54. Banks
In accordance with this Law, all credit institutions which,
pursuant to their respective bylaws, accept money into accounts
and make payments on behalf of a third person shall be considered
as banks.
Article. Days for Presenting or Protesting Cheques
A cheque may be presented or protested only on a working
day.
If the last day of the time limit for registering the deeds
established by law, especially for presenting or protesting a
cheque or registering an analogous certification falls on a
lawfully established day off, the time limit therefor shall be
extended until the next working day after the expiry of the fixed
period. Days off falling in between shall not be included within
the period.
Article 56. Setting the Time Period
The first day of validity of a cheque shall not be included
in the time periods provided for in this Law.
Article 74. Grace Period
Neither law-established not court-ordered grace periods
shall be allowed.