20:49
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Simple English definitions for legal terms
acceptance for honor
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A quick definition of acceptance for honor:
Acceptance is when someone agrees to the terms of an offer, either by saying yes or by doing something that shows they agree. This creates a binding contract. If someone changes the terms of the offer, it becomes a new offer. Acceptance can also refer to a buyer agreeing to take goods in a sale, or to someone agreeing to pay a negotiable instrument like a bill of exchange. Acceptance for honor is when a third party agrees to pay a debt to protect the honor or credit of one of the parties.A more thorough explanation:
Acceptance for honor is an agreement made by a third party to pay a debt when it becomes due if the original debtor fails to do so. This type of acceptance is not made by a party to the instrument, but by someone else who wants to protect the honor or credit of one of the parties. It is also known as acceptance supra protest or acceptance for honor supra protest.
For example, if a bill of exchange is dishonored by non-acceptance and is not yet overdue, a friend of the drawer or an indorser may accept it for the honor of the drawer or indorser. This means that the friend places their own name on the bill as the acceptor for the whole or part of the amount of the bill. After a protest has been drawn up declaring its dishonor by the drawee, the friend can pay the bill to prevent it from being sent back to the drawer or indorser as unpaid.
This type of acceptance inures to the benefit of all successors to the party for whose benefit it is made. It is an exception to the rule that only the drawee can accept a bill.