Understanding Bills of Exchange: Legal Framework and Requirements

Item 9: The Bill of Exchange

Securities: Concept and Classes

A security is a document essentially transmissible, required to exercise a right that is literal and autonomous. Its characteristics include:

• Legitimacy by Possession: Possession of the document is required to exercise the right.
• Principle of Literalism: The content of the right is defined by the actual content of the document.
• Principle of Autonomy: The holder of the document is not subject to personal defenses that the debtor held against previous holders.

The Bill of Exchange

Regulated by the Law of Exchange and Checks (CCCH), a bill of exchange is a title or value that incorporates an unconditional order issued by one person, addressed to another, to pay a certain sum of money. Three main figures appear:

• Maker (Drawer): The person issuing the document who gives the payment order and guarantees it.
• Drawee (Librado): The person to whom the payment order is directed. The drawee is not required to pay until they accept the obligation, becoming the acceptor.
• Payee (Policyholder): The person to whom the payment must be made.

Function: It serves as a tool for short-term credit in both commercial and financial contexts.

Causes of Exchange Obligations: The legal relationship justifying the issuance of the bill of exchange or any subsequent transmissions.

Bypass (Issuance)

The legal act of issuing a bill of exchange constitutes the first exchange statement.

Form and Requirements

The content of the draft must adhere to legal standards. Essential requirements must appear for the document to be valid as a draft, while natural requirements are supplied by law if omitted.

Essential Requirements

• The term "Bill of Exchange" must appear in the text.
• An unconditional mandate to pay a certain sum of money.
• The name of the person making the payment (the drawee). If the drawee matches the drawer, it is called a letter at own expense.
• The name of the person to whom payment should be made (the payee). If the payee matches the drawer, it is called a letter to the order itself.
• The date of issuance, which must match the signature of the drawer.