Section IX Brokerage

(1)

The drawer, the endorser or the guarantor may appoint one person - a broker - who where necessary may accept the bill of exchange or pay.

(2)

A broker may be any third party and any person liable under the bill of exchange, except the drawee who has already accepted it.

(3)

The broker shall be obliged to notify within two business days the person for whom he has been operating. If the broker fails to meet this term he shall be held liable for damages to the amount of the sum of the bill of exchange.

(4)

In the cases under paragraphs 2 and 3 the bill of exchange may be accepted or paid for honour by a broker acting for some of the debtors under the bill of exchange against whom a recourse action could be brought.

(1)

Acceptance through a broker shall be allowed in all cases where before maturity the bearer may bring his recourse action, except where the presentation of the bill of exchange for acceptance has been prohibited.

(2)

Where a person has been indicated in the bill of exchange for the purpose of acceptance or payment in case of necessity, the bearer may bring his recourse action before maturity against the person who has added the address, as well as against the persons who have signed after him, only if he has presented the bill of exchange to the person indicated at that address, and has ascertained the rejection by that person by means of a protest.

(3)

Except for the cases under paragraph 2 the bearer may refuse acceptance through a broker. If he accepts the brokerage, he shall forfeit the recourse he had before maturity against the person for whom acceptance has been effected, and against those who have signed after him.

The acceptance through a broker shall be noted on the bill of exchange and shall be signed by the broker. If the broker does not indicate for whom the acceptance was made, it shall be assumed to be for the drawer.

(1)

A broker who has accepted the bill of exchange shall be liable in respect of the bearer and the persons who have signed after the person for whom the brokerage has been effected, in the same way as him.

(2)

Notwithstanding the acceptance through a broker, the person for whom it has been effected, and the persons liable before him, may request from the bearer, against payment of the amount under Article 506, delivery of the bill of exchange, the protest and the receipt.

(1)

Payment through broker shall be allowed where the bearer may lodge his recourse on maturity date or before maturity.

(2)

The payment should be for the whole sum owed by the person for whom the brokerage has been effected, and should be done not later than on the date after expiration of the term for protest due to default on payment.

(1)

If the bill of exchange has been accepted for honour by a person with a place of residence at the place of payment, or if a person with a place of residence at the same place has been specified for payment in case of necessity, the bearer should present the bill of exchange to those persons not later than on the date following the date of expiration of the term for protest due to default on payment, and if necessary - to make such protest.

(2)

If the protest has not been made in due time, the person who has specified the address for payment in case of necessity, or for whom the bill of exchange has been accepted for honour, as well as those who have signed after him, shall be relieved of their obligation.

A bearer who refuses to accept payment through a broker shall forfeit his recourse action against those who would be relieved from their obligation due to the brokerage.

(1)

Payment through a broker shall be ascertained by a receipt on the bill of exchange, indicating for whom it has been paid, and if there is no such indication it shall be assumed that payment has been effected for the drawer.

(2)

The bill of exchange and the protest shall be delivered to the broker who has paid.

(1)

The broker who has paid shall acquire the rights under the bill of exchange against the person for whom he has paid, and against the persons liable to him under the bill of exchange. He may not endorse the bill of exchange.

(2)

The persons who have signed the bill of exchange after the person for whom it has been paid, shall be relieved of their obligation.

(3)

Where several persons have offered payment through a broker, priority should be given to the broker whose payment would relieve the highest number of debtors under the bill of exchange. The person who has paid contrary to the preceding sentence, being of knowledge of the circumstances, shall forfeit his recourse action against the persons who would have been relieved.

---

Next: Section X Set of copies and Transcripts
Up: BILL OF EXCHANGE
Previous: Section VIII Recourse Actions