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Bill of exchange is defined by section 3(a) of the Act as an unconditional order in writing addressed by one person to another, signed by the person giving the requiring the person to where it is addressed to pay on demand or at a fixed or determinable future time a sum certain in money or to the order of a specified person or bearer.

Section 3a of the act goes on to state that:

An instrument which does not comply with there conditions, or which orders any act to be done in addition to the payment of money is not a bill of exchange.


Stated the statutory requirement of a standard Bill of exchange with decided cases. Within the context of the Nigerian legal system as thus:


The bill must be imperative, although it may be covered in courteous terms.  It is a mere request. The document does not qualify as a bill of exchange. In other words a, bill of exchange must be an order something in the nature of command such as pay ANDREW the sum of 50 or it may be couched in polite terms such or please pay ANDREW the sum of 50. But a document reading  ‘

I should be pleased if you would pay ANDREW  the sum of 50’ would not be a bill of order.

This was held in RUH V Webb, (1794) 1 Esp, 130   that a bill which states that ‘Mr. N. will much oblige Mr N. by paying to JR or order twenty guineas on his account’ qualifies as a good bill of exchange.

On the other hand, a bill which states ‘Mr. L. please let the bearer have seven pounds and please it to my account and you will much oblige your humble servant, R.S.’ it was held that it was not a bill of exchange see also Little V Slackford (1828) I mood and M Mi Hamilton V. Spottiswoode (1894)4 Ex 200; see Crossley vainness, op at CH P.201


It must not order any act to be done in addition to the payment of money. Any condition contained in the document will take it out of the category of bills of exchange although of course, the document may still have effect as a valid equitable assignment by Section 3 (3) an order to pay out of a particular fund is not unconditional.

Therefore, a direction by A to B to pay C to move out of a particular fund due to A, is not a bill but bill may well be a good equitable payment of the mouse by A to C. Fenney V. Herle (1723) 2 Id Raym B61 Car 10s V Fancourt (1794)   5 term 482, Hill V Halford (1810) 2 Bos and 413. However, section 3 (3) goes on to say that an inequitable order which is coupled with.

i. An indication of a fund from which the drawee is to refund himself or

ii. A statement of the transaction which gives rise to the bill is unconditional.


The instrument must be in writing (either in ink or penal) and this includes typing and printing the signature of the drawer may be added at any time see section 18 and 19 of the Act Bills of Exchange 13A edition p 12 see section 23. What constitutes a signature is a question of fact. Normally a signature may be in the form of initiates to make by a rubber stamp.

It is not necessary that a party to a bill should sign the bill himself; it is sufficient it the bill is signed by an agent date authorized in his health. See Section 91


See section 2, 5a and (2) 6 (1) and (2)

The word ‘person’ in this regard includes a body of persons, incorporated or not.  E.g.  a limited liability company, a local authority, an incorporated club or a partnership see  Adesanya and Oloyede, op at P.155. 

A bill may be drawn to, or to the order of the drawer, e.g. a cheque payable to self; or it may be payable to, or to the order of drawer e.g. to a bank, ‘pay yourself’.

Where in a bill drawer and drawer are the same person or where the drawer is a fictitious person or a person not having capacity to contract the holds may treat the instrument at his option either as a bill of exchange or as a promising not see section 5 (2) Crossley Varies, op at P. 205. 

The reason for options is no doubt because, in the bill of this kind, the liability of the drawee accepts is illusory, so that the bill strongly reasonable a promissory note, where is simply a promise by the makers of the note unaccompanied by any order as a drawer.

Solomon V Solomon was a letter of the merchant who converted his business into a limited liability company, it consists of Solomon and his children as a member.

The company purchased the business of Solomon to 39.000 the purchase consideration was paid interns of 10.000, debenture conferring over the company’s assets 20.000 in fully paid share each and the balance. The company ran to difficulties in less than one year.

The assets of the company not sufficient to discharge the debenture. The company on behalf of unsecured creditors alleged that the company was in cham.

Court of appeal (British)

The focus of the court of Appeal

Six family members were never intended to take part to fulfil the chemical requirement because the size of the family members does not have the capacity to contract.

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