Electronic Presentment of a Bill
9.28
Electronic presentment is provided for in the US by UCC § 4-110. Thereunder, the presentment of an ‘item’ may be made pursuant to an interbank agreement for presentment.
‘Item’ is defined in UCC § 4-104(a)(9) to mean ‘an instrument or a promise or order to pay money handled by a bank for collection or payment’. This is broader than a cheque and hence may be taken to apply to bills as well.9.29
Under UCC § 4-110, ‘[a]greement for electronic presentment’ could be in the form of an agreement, clearing-house rule, or Federal Reserve regulation or operating circular.[892] The agreement is to provide ‘that presentment... may be made by the transmission of an image of an item or information describing [it]... rather than delivery of the item itself’ The transmission of the image or information constitutes a ‘presentment notice’; its receipt is the actual presentment. Other elements that may be covered by the agreement for electronic presentment are ‘procedures governing retention... payment, dishonor and other matters. .. ’ Arguably, return procedures fall within the ambit of the agreement. An interbank voluntary agreement may be either bilateral or multilateral.[893] In any event, as per the language quoted above, ‘agreement for electronic presentment’ under UCC § 4-110 may not be entirely consensual; however, this is in line with UCC § 4-103(b), under which ‘Federal Reserve regulations and operating circulars, clearing-house rules, and the like have the effect of agreements... whether or not specifically assented to by all parties interested in items handled’.
9.30 Similarly, in the UK, BEA, s 89A(1) deals with presentment of instruments by electronic means.
Thereunder, ‘presentment for payment of an instrument... may be effected by provision of an electronic image of both faces of the instrument, instead of by presenting the physical instrument, if the person to whom presentment is made accepts the presentment as effective’. According to BEA, s 89B(1), excluding banknotes, section 89A applies to:(a) a cheque, or
(b) any other bill of exchange or any promissory note or other instrument—
(i) which appears to be intended by the person creating it to enable a person to obtain payment from a banker indicated in it of the sum so mentioned,
(ii) payment of which requires the instrument to be presented, and
(iii) which, but for section 89A, could not be presented otherwise than by presenting the physical instrument.[894]
9.31 BEA, s 89B(1)(b)(i) covers not only a bill drawn on a banker, but also any bill payable at a bank regardless on whom it is drawn. It thus covers a trade acceptance drawn on a buyer, as long as it ‘appears to be intended by the person creating it to enable a person to obtain payment from a banker.’ Perhaps a broader provision may be required in the BEA, allowing the transmission of an electronic image to any party who agreed to receive an electronic presentment.
Under another proposed amendment, the presenter ought to be taken to warrant that the image sent accurately represents the bill, as well as undertake to indemnify any person who suffered loss as a result of not presenting the original bill.9.32 A drawee ought to be entitled to transmit back its acceptance to the presenting bank on an electronic image. The drawee will then be taken to make all warranties and incur all indemnification liabilities made and incurred by the drawer of an electronic bill, as discussed further in section VI below.
9.33 For their part, the ICC’s uniform rules for the collection of bills in international trade[895] address the issue of ‘presentation’, being under article 5(a), ‘the procedure whereby the presenting bank makes the documents available to the drawee as instructed’. However, form of presentation is not provided for and thus the general law, as discussed above, applies with regards to bills.[896]
IV.