| mekanik |

| bills of exchange: signing as aval |

An aval is a person who undertakes to act as a surety as evidenced by his signature on a negotiable instrument. A person signs a bill or note as the signer of an aval where he signs the bill or note and expressly indicates that he is a surety by using the words 'as aval' or 'as surety' or 'as guarantor'.

 

It is, however, not essential that there should be an express indication that the person signing the instrument intends to be a surety. The unqualified signature of a person other than the drawer, maker, drawee or payee made on the back of the bill or note payable to order before indorsement by the payee is sufficient to constitute such an indication.

 

The signer of an aval may specify in the bill or note the party for whom he has given his aval, failure to do so will result in the signer of the aval being deemed to have given his aval for the drawer or maker. If the bill has been accepted, whether before or after signing of the aval, the signer of that aval is deemed to have given his aval for the acceptor.

 

The signer of an aval is liable jointly and severally with and as surety for, the party for whom he has given his aval or is deemed to have given his aval. Whether or not the stranger may lead evidence to show the true nature of his liability when sued by a holder or a holder for value will depend on the relationship between the parties. If the parties are immediate, extrinsic evidence may be admissible to show their true relationship, but where they are remote it is less likely that such evidence would be admissible.

 

The signer of an aval is not an indorser and will not be discharged by the holder's failure to give him notice of dishonour. Where an aval signed a cheque that had not been signed by the drawer, the unsigned cheque constituted a bill which, for lack of that signature, was inchoate. However, the aval's obligations arose qua aval at the latest when the cheque, having been signed by the drawer, was delivered, and the aval was in those circumstances liable. It is accordingly not necessary to give the signer of an aval notice of dishonour in order to render the signatory liable.

 

No contract on a bill, including that of the signer of an aval, shall be complete and irrevocable until delivery of the instrument in question in order to conclude such a contract. If an aval is written on a bill, however, and the signer of the aval gives notice to, or according to the directions of, the person entitled to the bill that he has signed it, the contract of aval becomes complete and irrevocable prior to delivery of the instrument.

 

Where the signer of an aval pays the bill or note, he acquires the rights arising out of the bill or note against the person for whom he has given his aval or is deemed to have given his aval and against all parties liable to that person. The benefits of excussion and division, available under the common law to a surety, are no longer available to a signer of an aval.

 

 

 

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delport ward & pienaar

attorneys, notaries &  conveyancers
1st floor - cornerstone house

16 loop street

cape town

8001

 

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+27-21-419.3733

 

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| info@dwp.co.za |

 

 

1st floor - cornerstone house, 16 loop street, cape town | docex 600, cpt | t, +27-21-4193733 | f, +27-21-4193743

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