Classification of Qualified Acceptance

Qualified acceptance may be classified in the following lines

1. Conditional acceptance,

2. Partial acceptance,

3. Qualified as to place,

4. Qualified as to time,

5 Made by someone or more of the drawees. but not by all.

 


1) Conditional Acceptance: A conditional acceptance is one which makes payment by the acceptor dependent on the fulfilment of a condition therein stated. The following are instances of conditional acceptances:

i) Accepted payable when cash is received for the cargo of the ship.

ii) Accepted payable when goods consigned to someone are sold.

iii) Accepted payable on giving up a bill of lading. In this case, it was held, that though the acceptance was a conditional acceptance, the acceptor could not be discharged by not handing over the bill of lading to him on the day the bill fell due.

The holder, in all such cases, will be entitled to treat the bill dishonoured if he chooses to take such acceptance, he should give notice of the nature of the acceptance to all parties. If the condition does not appear on the face of the instrument, it will not affect an innocent endorsee for value and if such acceptance is taken on a separate place of paper, it will bind only the immediate parties.

 

2) Partial Acceptance: A partial acceptance is “an acceptance to pay partly only of the amount for which the bill is drawn”. For example: by a bill drawn for Rs. 1,270 if accepted for Rs. 1,000, it is partial acceptance. If a holder takes acceptance only to part of the amount due on the bill, it discharges the prior parties who do not give their consent to such acceptance.

 

3) Qualified as to Place: A local acceptance is “an acceptance to pay only at a particular specified place” The emphasis is on the word “only” as “an acceptance to pay at a particular place is a general acceptance unless it expressly states that the bill is to be paid there only and not elsewhere.” Thus, an acceptance in the form “accepted payable at X & Co.”, is a general acceptance; but an acceptance in the form “accepted payable at X & Co., and not elsewhere” is a qualified acceptance.

 

4) Acceptance qualified as to time: An acceptance can be made qualified as to time, if the drawee, while accepting, says that the amount due will be paid not at the time mentioned in the instrument but at any other time, whether sooner or later. This, without doubt, means to varying the contract and hence, unless there is a consent, prior parties to the instrument stand discharged.

 

5) Acceptance made by someone or more of the drawees but, not by all: An acceptance made by someone or more of the drawees but not by all is also a qualified acceptance. In case of persons, not partners. Acceptance must be made by all of them. If any of them refuses to accept, the holder has a right to treat the bill as dishonoured. But, in case of partnerships, acceptance by one is considered acceptance by all.

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