10.1 Bill of Exchange汇票
A bill used in domestic trade is a written statement issued by the seller stating the amount of money the buyer owes for the goods or services provided and asking him/her to make payment.We must have been billed by a restaurant where we have dinner.The little piece of paper presented by the waiter or waitress after dinner that shows us how much we have spent on the dinner is a bill.Upon receiving the bill,we have to pay it,either right away or some time later,though the latter is a rare case for a dinner.
A bill used in international trade,likewise,is a written order to pay.It is normally issued and addressed by the exporter to the importer or another party that has the obligation to pay—the payer.When the payer is presented the bill and signs it,he/she is legally bound by his/her domestic law to make the payment,then the bill resembles an IOU(I owe you)from the payer’s perspective,though in a more serious way.He/she has either to pay on demand or,when presented the bill again,pay on a fixed or determinable future date.
As the exporter,you may also transfer the bill to someone else in order to get payment sooner,reimburse your debt,grant discounts in the form of a refund to customers,etc.If you want to get payment sooner,for example,you may sell the bill to anyone interested in buying it,such as a bank,which is called “negotiation”,but it is mostly sold at a discounted price as the buyer wants to charge a fee for advancing the money to you before it is due.If you want to reimburse a debt owed to your supplier,you may transfer the bill to him/her.In either case,the bill is exchangeable for money,that is why it is called a“bill of exchange”.The transfer can be achieved via a behavior called“endorsing”or “endorsement”—you sign at the back of the bill,indicating your intention to transfer it.
This feature of supporting transference enables exporters to collect payment sooner,settle their debts faster and drive sales,which makes the bill of exchange particularly welcome in international trade.In addition,a bill of exchange is also stipulated to be an “unconditional”order to pay,implying that there is no need to ask about the underlying reasons when one deals with transference of a bill,which adds to its liquidity.
Bills of Exchange Act 1882 of Great Britain defines a bill of exchange(draft)as an unconditional order to pay in writing,addressed by one person to another,signed by the person drawing it,requiring the person to whom it is addressed to pay on demand or on a fixed or determinable future date a certain sum of money to or to the order of a specified person,or to bearer.China’s Law on Negotiable Instruments defines a bill of exchange as a negotiable instrument,signed and issued by the drawer,who authorizes the drawee to pay unconditionally a sumcertain in money to the payee or the holder at sight or on a specified date.The law also clarifies the jurisdiction issue in Chapter V Application of Law to Negotiable Instruments Involving Foreign Elements.