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.
Share through
