Chapter I General Provisions |
| Article 1 |
（Types of bills）The term "negotiable instrument" as used in this Act means a bill of exchange, promissory note, or check. |
| Article 2 |
（Definitions of bills of exchange）A bill of exchange is a negotiable instrument signed and issued by the drawer authorizing the drawee to pay unconditionally at a fixed future date a sum certain in money to the payee or holder. |
| Article 3 |
（Definitions of promissory notes）A promissory note is a negotiable instrument signed and issued by the maker engaging himself to pay unconditionally at a fixed future date a sum certain in money to the payee or holder. |
| Article 4 |
（Definitions of checks and the finance industry）A check is a negotiable instrument signed and issued by the drawer authorizing a financial institution to pay unconditionally on demand a sum certain in money to the order payee or holder.
The term "financial institution" in the preceding paragraph means a bank, credit cooperative, farmers' association, or fishermen's association handling checking deposit business upon approval by the Ministry of Finance. |
| Article 5 |
（Responsibilities of the signatory）A person who signs his name to a negotiable instrument is liable on the instrument according to its tenor.
If a negotiable instrument is signed by two or more persons together, they shall be jointly and severally liable on the instrument. |
| Article 6 |
（Using a seal as replacement for the signature）A seal may be used on a negotiable instrument in lieu of signature. |
| Article 7 |
（Standards for determining the amount）If the sum payable by a negotiable instrument is expressed in words and also in figures and there is a discrepancy between the two, the sum denoted by the words is the amount payable. |
| Article 8 |
（Independence of bills actions）The appearance on a negotiable instrument of the signature of a person having no legal capacity to act or limited legal capacity to act does not in any way affect the effect of any other signature. |
| Article 9 |
（Anonymous agency）An agent who signs a negotiable instrument without expressly indicating that he signs on behalf of the principal shall be personally liable on the instrument. |
| Article 10 |
（No agency and agency in excess of authority）A person who signs a negotiable instrument as agent without authorization from the person on whose behalf he purports to act shall be personally liable on the instrument.
If an agent acts beyond the scope of his authority with respect to a negotiable instrument, he shall be personally liable on the instrument to the extent to which he exceeds his authority. |
| Article 11 |
（Formality, authorized blank bills, alteration）Unless otherwise provided by this Act, a negotiable instrument that is wanting in any of the particulars required by this Act to be stated on a negotiable instrument is void.
A holder that in good faith acquires a negotiable instrument bearing the particulars required by this Act may exercise his rights according to its tenor. A person liable on the negotiable instrument may not allege against the holder that the negotiable instrument is void because it originally was wanting in any of the required particulars.
Any particular except the sum of money stated on a negotiable instrument may be altered by the entry maker before delivery, but he shall sign at the place of the alteration. |
| Article 12 |
（Records of invalidity of bills）Any particular stated on a negotiable instrument that is not provided for in this Act shall not give rise to any legal force and effect insofar as concerns the instrument. |
| Article 13 |
（Defense with bills）A person liable on a negotiable instrument may not raise against a holder the defenses that are available as between the person and the drawer or maker, or between the person and any party prior to the holder. But this provision shall not apply if the holder acquired the negotiable instrument in bad faith. |
| Article 14 |
（Good faith acquisition）A person who acquires a negotiable instrument in bad faith or through gross negligence may not enjoy any rights in the instrument.
A person who acquires a negotiable instrument without consideration or with disproportionate consideration may not enjoy any rights superior to any party prior to him. |
| Article 15 |
（Forgery of bills and forgery of signatures）The legal force and effect of a genuine signature on a negotiable instrument shall not be affected even if the instrument itself or one of the signatures thereon is forged. |
| Article 16 |
（Alteration of bills）If a negotiable instrument is altered, the persons who signed it before the alteration are liable on the instrument according to the original tenor; those who signed it after the alteration are liable on the instrument according to the altered tenor. If the time of signing of any person cannot be ascertained, the person's signature is presumed to have been affixed to the instrument before the alteration.
A person who participates in or agrees to the alteration of a negotiable instrument shall be liable on the instrument according to the altered tenor regardless whether the person's signature is affixed before or after the alteration. |
| Article 17 |
（Cancellation of bills）If a signature or an insertion on a negotiable instrument is cancelled or struck out except by the intentional act of the obligee, the legal force and effect of the signature or insertion on the instrument shall not be affected. |
| Article 18 |
（Payment suspension notice）In the event of loss of a negotiable instrument, the obligee may give notice to stop payment of the instrument, but shall, within 5 days after giving of the stop payment notice, present the drawee with evidence that a petition has been filed for public summons.
The stop payment notice shall become void if it is not given in accordance with the proviso of the preceding paragraph. |
| Article 19 |
（Public summons）In the event of loss of a negotiable instrument, the obligee may file a petition for public summons.
After initiation of the public summons procedure, the petitioner may, upon providing the required security, demand payment of the sum payable by the lost instrument if it is overdue. If the petitioner is not in a position to provide the required security, he may request that the sum payable by the lost instrument be deposited in accordance with law. If the lost instrument is not yet due, the petitioner may, upon providing the required security, request the issuance of a substitute instrument. |
| Article 20 |
（Location for exercising or securing rights in bills）Any acts required to be done by a party to a negotiable instrument for the exercise and preservation of rights in the instrument shall be performed at the place designated on the instrument. In the absence of a designated place, the acts shall be performed at the party's place of business, or, in the absence of a place of business, at the party's domicile or residence.
If the place of business, domicile, or residence of the party against whom a protest is contemplated to be made is unknown, a request may be made to the notary public office of a court, or a chamber of commerce, or other public office for investigations into the party's whereabouts. If, after investigations, the whereabouts of the party still cannot be ascertained, the protest may be made at the notary public office of the court, the chamber of commerce, or other public office. |
| Article 21 |
（Timing for exercising or securing rights in bills）Any acts required to be done vis-?-vis a party to a negotiable instrument for the exercise and preservation of rights in the instrument shall be performed during the business hours of a business day of the party. If the party does not have determinate business days or specified business hours, the acts shall be performed during the customary business hours of a customary business day. |
| Article 22 |
（Extinctive prescription of bills and claim for repayment of interests）Rights in a negotiable instrument are extinguished by prescription if not exercised within 3 years from the date of maturity of the instrument against the acceptor of a bill of exchange or the maker of a promissory note, or from the date of issuance for promissory note payable at sight. Rights on a check are extinguished by prescription if not exercised within 1 year from the date of drawing against the drawer of the check.
The right of recourse of the holder of a bill of exchange or promissory note against any party prior to him is extinguished by prescription if not exercised within 1 year from the date when the protest is made. The right of recourse of the holder of a check against any party prior to him is extinguished by prescription if not exercised within 4 months from the date when the protest is made. If there is a waiver of protest, the period of prescription applicable to a bill of exchange or promissory note begins to run from the date of maturity, while that applicable to a check begins to run from the date of presentment for payment.
The right of recourse of an endorser of a bill of exchange or promissory note against any party prior to him is extinguished by prescription if not exercised within 6 months from the date of payment or from the date suit was brought against him, as the case may be. The right of recourse of an endorser of a check against any party prior to him is extinguished by prescription if not exercised within 2 months.
Despite extinction of rights in a negotiable instrument by reason of prescription or of non-compliance with any of the procedural formalities under the provisions of this Act, the holder of the instrument may still claim against the drawer or maker, or the acceptor, repayment to the extent to which the latter may have been benefited. |
| Article 23 |
（Allonge）If more room than the blank space left on a negotiable instrument is needed for making entries, the instrument may be extended by having an allonge annexed to it.
The first entry maker after the annexing of an allonge shall sign on the abutting edges. |