Definition and forms of Qualified acceptance

In relation to negotiable instruments:

i) Define the term “qualified acceptance”.

ii) Highlight four forms of qualified acceptance

Definition of qualified acceptance

  • A qualified acceptance is one whereby some qualification is introduced.
  • This is acceptance whereby the drawee modifies or varies the bill.

Forms of qualified acceptance

  • Partial acceptance where the drawee undertakes to honor only part of the sum ordered to be paid.
  • Local acceptance – involves the place where the bill must be honored. Qualification as to time – where the drawee attempts to extend the time for acceptance and payment.
  • Conditional acceptance -where the drawee specifies some condition about the charges, costs and so on in connection with the bill.
  • Failure of one drawee to sign – where one of the drawees named refuses or fails to sign the bill, if the holder agrees to accept the signatures of the others, it amounts to qualified acceptance.

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