Bills of Exchange Act (R.S.C., 1985, c. B-4)

Marginal note:Law applicable

160 Subject to this Act, the interpretation of the drawing, endorsement, acceptance or acceptance under protest of a bill, drawn in one country and negotiated, accepted or payable in another, is determined by the law of the place where the contract is made, but where an inland bill is endorsed in a foreign country, the endorsement shall, with respect to the payer, be interpreted according to the law of Canada.

Marginal note:Law as to duties of holder

161 The duties of the holder with respect to presentment of a bill for acceptance or payment and the necessity for or sufficiency of a protest or notice of dishonour are determined by the law of the place where the act is done or the bill is dishonoured.

Marginal note:Currency

162 Where a bill is drawn out of but payable in Canada and the sum payable is not expressed in the currency of Canada, the amount shall, in the absence of an express stipulation, be calculated according to the rate of exchange for sight drafts at the place of payment on the day the bill is payable.

Marginal note:Due date

163 Where a bill is drawn in one country and is payable in another country, the due date thereof is determined according to the law of the place where it is payable.

Official Images and Electronic Presentment

Marginal note:Definitions

163.1 The following definitions apply in this section and sections 163.2 to 163.6.

bank

bank has the same meaning as in section 164. (banque)

eligible bill

eligible bill means a bill that is of a class specified by a by-law, a rule or a standard made under the Canadian Payments Act. (lettre admissible)

official image

official image, in respect of an eligible bill, means an image of that eligible bill created by or on behalf of a bank in accordance with by-laws, rules or standards made under the Canadian Payments Act, together with any data in relation to the eligible bill prepared in accordance with those by-laws, rules and standards, and includes a display, a printout, a copy or any other output of that image and that data created by or on behalf of a bank in accordance with those by-laws, rules and standards. (image officielle)

Marginal note:Status of official image

163.2 An official image of an eligible bill may be dealt with and used for all purposes as though it were the eligible bill.

Marginal note:Electronic presentment

• 163.3 (1) Despite anything in this Act, a bank may present for payment an official image of an eligible bill electronically in accordance with by-laws, rules or standards made under the Canadian Payments Act and, if it does so, the requirements of this Act respecting the presentment for payment of the eligible bill are deemed to have been complied with.

• Marginal note:Discharge by payment

  (2) The eligible bill and its official image are discharged if payment in due course is made by or on behalf of the drawee after the electronic presentment for payment of the official image of the eligible bill.

Marginal note:Presumption

• 163.4 (1) In the absence of evidence to the contrary, a document purporting to be an official image of an eligible bill is presumed to be an official image of the eligible bill.

• Marginal note:Admissibility

  (2) An official image of an eligible bill is admissible in evidence for all purposes for which the eligible bill would be admitted as evidence without proof that the official image was created by or on behalf of a bank in accordance with the by-laws, rules or standards made under the Canadian Payments Act.

• Marginal note:True copy of contents

  (3) In the absence of evidence to the contrary, an official image of an eligible bill is presumed to be a true and exact copy of the contents of the eligible bill.

Marginal note:Effect of destruction

163.5 If an eligible bill is destroyed in accordance with by-laws, rules or standards made under the Canadian Payments Act and there is an official image of the bill,

• (a) a person’s rights and powers in relation to the eligible bill are not affected by reason only that the person does not possess it;

• (b) the destruction does not affect any person’s rights, powers, duties and liabilities in relation to the eligible bill; and

• (c) the eligible bill is not considered to be lost or to have been materially altered or intentionally cancelled.

Marginal note:Warranty

• 163.6 (1) A bank that creates or purports to create an official image of an eligible bill, or on whose behalf an official image of an eligible bill is created or purported to be created, warrants that the official image or the purported official image, as the case may be, was created in accordance with by-laws, rules or standards made under the Canadian Payments Act and that it accurately represents the eligible bill.

• Marginal note:Damages

  (2) Any person who has suffered damages as a result of a breach of the warranty has a cause of action for damages against the bank.

PART IIICheques on a Bank

Marginal note:Definition of “bank”

164 In this Part, bank includes every member of the Canadian Payments Association established under the Canadian Payments Act and every local cooperative credit society, as defined in that Act, that is a member of a central, as defined in that Act, that is a member of the Canadian Payments Association.

Marginal note:Cheque

• 165 (1) A cheque is a bill drawn on a bank, payable on demand.

• Marginal note:Provisions as to bills apply

  (2) Except as otherwise provided in this Part, the provisions of this Act applicable to a bill payable on demand apply to a cheque.

• Marginal note:Cheque for deposit to account

  (3) Where a cheque is delivered to a bank for deposit to the credit of a person and the bank credits him with the amount of the cheque, the bank acquires all the rights and powers of a holder in due course of the cheque.

Marginal note:Presentment for payment

• 166 (1) Subject to this Act,

  • (a) where a cheque is not presented for payment within a reasonable time of its issue and the drawer or the person on whose account it is drawn had the right at the time of presentment, as between him and the bank, to have the cheque paid, and suffers actual damage through the delay, he is discharged to the extent of the damage, that is to say, to the extent to which the drawer or person is a creditor of the bank to a larger amount than he would have been had the cheque been paid; and

  • (b) the holder of the cheque, with respect to which the drawer or person is discharged, shall be a creditor, in lieu of the drawer or person, of the bank to the extent of the discharge, and entitled to recover the amount from it.

• Marginal note:Reasonable time

  (2) In determining what is a reasonable time, within this section, regard shall be had to the nature of the instrument, the usage of trade and of banks and the facts of the particular case.

Marginal note:Authority to pay

167 The duty and authority of a bank to pay a cheque drawn on it by its customer are determined by

• (a) countermand of payment; or

• (b) notice of the customer’s death.

Crossed Cheques

Marginal note:Crossed generally

• 168 (1) Where a cheque bears across its face an addition of

  • (a) the word “bank” between two parallel transverse lines, either with or without the words “not negotiable”, or

  • (b) two parallel transverse lines simply, either with or without the words “not negotiable”,

  that addition constitutes a crossing, and the cheque is crossed generally.

• Marginal note:Crossed specially

  (2) Where a cheque bears across its face an addition of the name of a bank, either with or without the words “not negotiable”, that addition constitutes a crossing, and the cheque is crossed specially and to that bank.

Marginal note:By drawer

• 169 (1) A cheque may be crossed generally or specially by the drawer.

• Marginal note:By holder

  (2) Where a cheque is uncrossed, the holder may cross it generally or specially.

• Marginal note:Varying

  (3) Where a cheque is crossed generally, the holder may cross it specially.

• Marginal note:Words may be added

  (4) Where a cheque is crossed generally or specially, the holder may add the words “not negotiable”.

• Marginal note:By bank for collection

  (5) Where a cheque is crossed specially, the bank to which it is crossed may again cross it specially to another bank for collection.

• Marginal note:Changing crossing

  (6) Where an uncrossed cheque, or a cheque crossed generally, is sent to a bank for collection, it may cross it specially to itself.

• Marginal note:Uncrossing

  (7) A crossed cheque may be reopened or uncrossed by the drawer writing between the transverse lines the words “pay cash”, and initialling the same.

Marginal note:Material part

• 170 (1) A crossing authorized by this Act is a material part of the cheque.

• Marginal note:Altering crossing

  (2) It is not lawful for any person to obliterate or, except as authorized by this Act, to add to or alter the crossing.

Marginal note:Crossed to more than one bank

171 Where a cheque is crossed specially to more than one bank, except when crossed to another bank as agent for collection, the bank on which it is drawn shall refuse payment thereof.

Marginal note:Liability for improper payment

• 172 (1) Subject to subsection (2), where the bank on which a cheque crossed as described in section 171 is drawn nevertheless pays the cheque, or pays a cheque crossed generally otherwise than to a bank, or, if crossed specially, otherwise than to the bank to which it is crossed or to the bank acting as its agent for collection, it is liable to the true owner of the cheque for any loss he sustains owing to the cheque having been so paid.

• Marginal note:Payment in good faith and without negligence

  (2) Where a cheque is presented for payment that does not at the time of presentment appear to be crossed, or to have had a crossing that has been obliterated, or to have been added to or altered otherwise than as authorized by this Act, the bank paying the cheque in good faith and without negligence shall not be responsible or incur any liability, nor shall the payment be questioned by reason of the cheque having been crossed, or of the crossing having been obliterated or having been added to or altered otherwise than as authorized by this Act, and of payment having been made otherwise than to a bank or to the bank to which the cheque is or was crossed, or to the bank acting as its agent for collection, as the case may be.