United Nations Convention on International Bills of Exchange and International Promissory Notes

General Information

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What is it about?

The Convention presents, for optional use in international transactions, a modern, comprehensive set of rules for international bills of exchange and international promissory notes. The text of the Convention reflects a deliberate policy to minimize departures from the content of common and civil law systems, preserving, where possible, the rules on which those systems concur. Where conflicts exist, requiring selection of one system's rule or a compromise solution, the Convention introduces a number of novel provisions. Another group of new rules are the result of special efforts to have the Convention respond to modern commercial needs and banking and financial market practices. According to the Convention, a bill of exchange is a written instrument which: a) contains an unconditional order whereby the drawer directs the drawee to pay a definite sum of money to the payee or to its order; b) is payable on demand or at a definite time; c) is dated; and d) is signed by the drawer. A promissory note is a written instrument which: a) contains an unconditional promise whereby the maker undertakes to pay a definite sum of money to the payee or to its order; b) is payable on demand or at a definite time; c) is dated; d) is signed by the maker.

Why is it relevant?

The Convention as adopted aims at facilitating international trade and finance by reducing uncertainty related to International Bills of Exchange and International Promissory Notes. Perhaps its most prominent advantage resides in its compatibility with both civil and common law systems.

Additional Information

The Convention applies only to international instruments that bear in both their heading and their text the words "International bill of exchange (UNCITRAL Convention)" or "International promissory note (UNCITRAL Convention)". Applicable national laws are used if no mention is made. The Convention is similar to the Convention Providing a Uniform Law For Bills of Exchange and Promissory Notes (Geneva, 7 June 1930), though that Convention is most relevant for civil law systems.

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