Exchange and Check Law
The Exchange and Check Law was created in 1985 with the aim of solving certain conflicts produced with the previous laws that regulated these titles. This law aims to provide the security and confidence that bills of exchange, promissory notes and checks had lost.
The Exchange and Check Law of 1985 is drafted to renew this section of Commercial Law and adapt the regulations governing these instruments to the uniform legislation of Geneva. Before this reform, there was an almost century-old regulation that did not offer the necessary guarantees for the credits to which these securities refer.
In the case of the bill of exchange, the previous legislation was inspired by the French regulations of this instrument. In addition to this, the legislation in force until 1985 incorporated numerous shortcomings directly linked to the system of exceptions enforceable by the exchange debtor.
This new law includes many new features. Roughly, the formal requirements of the regulated titles and their validity are detailed. For example, I quote verbatim, "when a bill of exchange is written the amount of the same in letters and in numbers, the amount written in letters will be valid, in case of difference."
What aspects does the Exchange and Check Law regulate?
The structure of the regulations can be divided into two large blocks. First, it refers to the bill of exchange, regulating the following aspects:
- Issue and form.
- Actions for non-acceptance and non-payment.
- Assignment of the provision.
- Plurality of copies and copies.
- Loss, theft or destruction of the copy.
In relation to the regulation of the check, the following is collected:
- Issue and form.
- Presentation and payment.
- Cross check and check to pay into account.
- Actions in case of non-payment.
- Loss, theft or destruction of the check.
- Fake or forged check.
Finally, it is important to note that these regulations have been modified over time. With the aim of adapting it and covering the new needs of economic activity.
Objectives of the Exchange and Check Law
Among the different objectives of the Exchange and Check Law, we can highlight the following:
- Adaptation to the uniform legislation of Geneva.
- Incorporate Spain into the set of States that made possible the constitution of the European Economic Community (EEC), agreed in the Treaty of Rome.
- Facilitate the circulation of bills of exchange and checks, without forcing the acquirer to examine the documents.
- Establish certain guidelines regarding the form and content of these documents.
- Restore the trust that had disappeared from the legal system and from good faith.To achieve this, the debtor's obligations are clearly established, ensuring that none of the conditions are ambiguous and give rise to confusion.
In conclusion, the Exchange and Check Law updates the previous regulations, which had become obsolete. It tries to reestablish the lost confidence in these titles and clearly explains the conditions and characteristics that they must meet in order for them to be valid. In this way, all those discrepancies that may arise are eliminated and the functioning of a common market in the European Union is facilitated.