Types of Acceptance

Acceptance may be classified into two types:

1) General Acceptance

2) Qualified Acceptance


General Acceptance

An acceptance which assents without qualification to the order of the drawer is called general acceptance. In general acceptance the drawee accepts the liability to pay the amount as mentioned in the bill in full, without any condition or limitation. Drawee accepts according to the apparent tenor of the bill.


Qualified Acceptance

A qualified acceptance in express terms varies the effect of the bill as originally drawn. In the case of qualified acceptance, the drawee accepts the bill subject to certain conditions, conditions as to time, place, event, amount, drawees, etc. may be added to the acceptance. These conditions make the acceptance qualified.

The holder of a bill is not bound to take a qualified acceptance. Where the acceptance is qualified, he may, at his option, treat the bill as dishonoured, and after giving due notice of dishonour sue the drawer and prior endorsers. If, however, he chooses to take a qualified acceptance, he must be careful to secure the assent of all the prior parties, because all prior parties are discharged unless they give their consent to the qualified acceptance. The drawer or an endorser of a bill undertakes that the drawee on presentment will accept the bill and make payment at its maturity, and, in default, the drawer or the endorser, as the case may be, will pay up the amount of the bill. If the holder, against such a contract of the drawer or the endorser, accepts a qualified acceptance, he varies the contract and, therefore, all the parties prior to him are discharged, unless they give their consent to such qualified acceptance.

As between the drawee and the holder, if the drawee is in contract with the drawer that he will accept; his refusal will make him liable to damages, which may be either to the face-value of the bill, or even to the market value thereof.

Qualification of acceptance must be clearly expressed. An acceptance will not be treated as a qualified acceptance unless the qualification is expressed in the clearest language. To qualify an acceptance, the acceptor must do so on the face of the bill in clear and unequivocal terms by plain and intelligible language, in such a manner that any person taking the bill cannot fail to understand that it was accepted subject to an express qualification.

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