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Bill of Exchange definition and turning a statement of account into a contract
Hi all, I am sorry my questions are always long and technical but here’s another one.
In the “Accept a public offer to contract on your terms” webinar regarding turning a statement of account into a contract (e.g. for the purpose of issuing a Promissory note with it), Mark refers to various sections of the BOE Act (Eg. S21, S59 etc) in regard to completing the contract.
Most of those sections refer to a “Bill”. Now, S4 defines “Bill – means Bill of Exchange”.
So wouldn’t the statement of account need to comply with the definition of a Bill of Exchange and, in essence, be a Bill of Exchange for these sections to apply when completing the contract?
This would contradict with what Mark has said in another webinar; that the statement of account and/or completed contract is NOT a Bill of Exchange (I believe he quoted a case “Sprowel vs ATO” I think?)
Can anyone explain this?
Also, can anyone explain what is meant by an “unqualified order to pay” in S8 (3)?
S8 quoted below for reference:
“8 Bill of exchange defined
(1) A bill of exchange is an unconditional order in writing, addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand, or at a fixed or determinable future time, a sum certain in money to or to the order of a specified person, or to bearer.
(2) An instrument which does not comply with these conditions, or which orders any act to be done in addition to the payment of money, is not a bill of exchange.
(3) An order to pay out of a particular fund is not unconditional within the meaning of this section; but an unqualified order to pay, coupled with:
(a) an indication of a particular fund out of which the drawee is to re‑imburse himself or herself, or a particular account to be debited with the amount; or
(b) a statement of the transaction which gives rise to the bill; is unconditional.”
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6 Replies
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It sounds like (1) is describing the statement sent to you and because it is not stamped ‘not negotiable’ it means under equity you can have your input into it and then stamp it not-negotiable yourself when you have finished adding your terms.
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Thanks Morag. The thing that’s throwing me off is in another video he says that the contract you complete is not a bill of exchange. Perhaps he meant that the statement of account is a BoE but once completed into a contract it is no longer a BoE.
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I think you accept the offer via the statement and you create a PN or BOE to go with it. If you have the Manual on page 93 it outlines the steps very clearly.
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I have all the payment/BOE modules but what manual are you referring to?
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You get the manual when you buy the premium starter pack.
God bless,
Brian
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Hi Brandon,
Disclaimer : New guy with no idea here. But at the risk of being wrong I’ll give it a go.
My understanding is that the statement of account is an incomplete instrument or contract which you complete and turn into a contract. It is not a bill of exchange but it accompanies the Bill of exchange (PN or MO) as the completed contract between the parties.
So the statement becomes the completed contract. The BOE is the payment.
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</div><div>No clue on the “unqualified order to pay” sorry. I’ve read it a few times and still makes no sense to me.
Best wishes
Bernie
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