Legal Counselling

Vietnam: Principles of transfer of bills of exchange

10:19, 14/01/2008

The Law on negotiable instruments 2005 of Vietnam was promulgated on November 29, 2005, regulating negotiable instrument relationships with respect to issuance, acceptance, guarantee, endorsement, pledge, collection, payment, recourse, and initiation of legal action.

According to Article 29 of the Law on negotiable instruments 2005 of Vietnam, transfer of bills of exchange must ensure the following principles:

Firstly, the transfer of a bill of exchange means the transfer of the total sum stated in the bill of exchange. The transfer of a part of the sum stated in the bill of exchange shall be invalid.

Secondly, the transfer of a bill of exchange to two or more persons shall be invalid.

Thirdly, the transfer of a bill of exchange by endorsement must be unconditional. The endorser shall not be allowed to write any conditions on the bill of exchange other than those provided in article 31 of this Law. All conditions accompanying the endorsement shall be invalid.

Fourthly, the transfer of a bill of exchange means the transfer of all rights arising from such bill of exchange.

Fifthly, a bill of exchange the period for payment of which has expired or which has been dishonored by non-acceptance or by non-payment may not be endorsed.

Sixthly, the beneficiary may endorse a bill of exchange to the acceptor, drawer or endorser.

View more at: The Law on negotiable instruments 2005 of Vietnam takes effect from July 01, 2006.

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