| Commentary

2 Payee and payer

| Commentary

2 Payee and payer

There are two fundamental principles applicable to negotiable instruments that ensure the payee’s position will not be prejudiced by accepting such an instrument in lieu of cash.

  1. 2.1

        Negotiable instruments are equivalent to deferred instalments of cash and, as a result, no defences or cross-claims can be raised as against the payee of the bill1. Accordingly, the payee of a negotiable instrument is entitled to summary judgment pursuant to CPR Part 24 without a stay of execution, unless ‘exceptional circumstances’ exist2. However, a court is entitled to set aside a statutory demand in insolvency proceedings based

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