LEGAL PRINCIPLE: COMMERCIAL LAW – Bills of Exchange – Notice of Dishonour – Waiver – Conduct Implying Waiver Under Section 50(2)(b) of the Bills of Exchange Act
PRINCIPLE STATEMENT
The legal consequences of dispensing with notice of dishonour is provided in section 50(2)(b) of the Bills of Exchange Act which states, '(b) by waiver express or implied; and notice of dishonour may be waived before the time of giving of notice has arrived, or after the omission to give due notice.' Thus the conduct indicating waiver and precluding the requirement for giving notice of dishonour may result from conduct before the time of giving notice and indeed preclude the giving of notice after the omission to give due notice... It is well settled that waiver is an abandonment of a right. Two elements must co-exist to constitute a waiver. First the party against who the doctrine is invoked must have knowledge or be aware of the act or omission which constitutes the waiver; and secondly, there must be on the part of the person against whom the doctrine is invoked, some unequivocal act adopting or recognising the act or omission.
RATIO DECIDENDI (SOURCE)
Per Karibi-Whyte, JSC, in Bank of the North Ltd. v. Alhaji Bala Yau (2001) NLC-2501993(SC) at pp. 25–26; Paras B–D.
"The legal consequences of dispensing with notice of dishonour is provided in section 50(2)(b) of the Bills of Exchange Act which states, '(b) by waiver express or implied; and notice of dishonour may be waived before the time of giving of notice has arrived, or after the omission to give due notice.' Thus the conduct indicating waiver and precluding the requirement for giving notice of dishonour may result from conduct before the time of giving notice and indeed preclude the giving of notice after the omission to give due notice... It is well settled that waiver is an abandonment of a right. Two elements must co-exist to constitute a waiver. First the party against who the doctrine is invoked must have knowledge or be aware of the act or omission which constitutes the waiver; and secondly, there must be on the part of the person against whom the doctrine is invoked, some unequivocal act adopting or recognising the act or omission."
EXPLANATION / SCOPE
Waiver of notice of dishonour under Section 50(2)(b) may be express or implied from conduct. Conduct indicating waiver may occur before notice is due or after omission to give notice. Waiver is abandonment of a right. Two elements must co-exist: (1) knowledge/awareness of the act or omission constituting waiver; (2) unequivocal act adopting or recognising the act or omission. The party must know their rights and intentionally relinquish them. Unequivocal conduct includes acknowledgments of liability, payment proposals, or negotiations without objecting to lack of notice. Conduct need not be explicit—inference from surrounding circumstances suffices. Waiver once established precludes later assertion of the right.