Electronic Evolution in Negotiability of Negotiable Instruments Essay

Electronic Evolution in Negotiability of Negotiable Instruments - Essay Example Throughout the legislative process, attention was constantly given to the areas like, Governments, banks, trading and other interested circles. The Convention applies only to international bills of exchange and international promissory notes when they comply with certain requisites of form. The use of an instrument governed by the Convention is thus entirely optional. Ratification or accession by a State does not subject all international instruments issued in that State to the legal regime of the Convention but merely opens the door for bankers and merchants to opt for this new legal regime if they deem it preferable in their professional judgment.(1) The United Nations Commission on International Trade Law Model Law on Electronic Commerce 1996 (2)is a set of rules that provides a model for reform in this context. It is recommended that the Model Law should be adopted to increase certainty in relation to the enforceability of electronic bills of exchange. The Convention defines the terms "bill of exchange" and "promissory note" and states the conditions on which a bill of exchange or promissory note is considered to be int ernational. A bill of exchange is a written instrument which contains an unconditional order whereby the drawer directs the drawee to pay a definite sum of money to the payee or to his order, on demand or at a definite time. It should be dated and it should be signed by the drawer. A promissory note is a written instrument which contains an unconditional promise whereby the maker undertakes to pay a definite sum of money to the payee or to his order; on demand or at a definite time and it should be dated and it should be signed by the maker.(3) Modern commercial practice has been influenced to a considerable degree during the years by electronics and computers in numerous ways. With all scientific developments within the business environment the pace of adjustment corresponds to a challenge to the traditional legal notions regulating patterns of trade. The development of such electronics and computers influence the instruments of trade also. Before taking peer in to the impact of such electronic evolution in negotiability of Negotiable instruments, let's have deep look into the scope of Convention on international transaction with reference to Bills of exchange and Promissory notes. Scope of the Convention In its desire to win commercial acceptance and free circulation of its instruments in international commerce, the Convention firmly upholds the principle of negotiability. The Convention considers the jurisdictions as per a