Highlight six ways in which a bill of exchange might be discharged
A bill may be discharged in any of the following ways: –
- Payment in due course;– If the bill is paid by or on behalf of the acceptor at or after maturity, it is discharged and parties freed.
- Acceptor – holder Maturity (Merger): If the acceptor of a bill becomes the payee of right, at or after maturity, the bill is discharged.
- Renunciation or waiver: – if the holder of a bill at or after maturity unconditionally and absolutely renounces his right against the acceptor, the bill is discharged. The renunciation must be written and the bill must be returned to the acceptor.
- Cancellation: If a bill is intentionally cancelled by the payee or his agent, and the cancellation is apparent thereon, the bill is discharged. An unintentional cancellation does not discharge a bill.
- Material Alteration: a material alteration on a bill discharges all the parties not privy to the alteration.