|Bill of exchange: dishonour|
Bills are dishonoured by: (1) non-acceptance, i.e. having been presented for acceptance and not accepted (allowing for the normal time lag. e.g. twenty-four hours); (2) non-payment. e.g. when payment is refused or the payer cannot be traced, or when presentation is not necessary and no payment has been made; (3) where a receiving order in bankruptcy has been made against the acceptor before payment is due.
Notice of dishonour must be given to parties whom it is intended to charge: drawer, acceptor and all endorsers. Notice need not be in writing but it is advisabl to make it so. Notice should be given promptly but unavoidable delay will be excused. It need not be given where the relevant party cannot be found or is a fictitious person, or where it has bee waived expressly or by implication.
|Reference: The Penguin Business Dictionary, 3rd edt.|