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Simple English definitions for legal terms
act of honor
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A quick definition of act of honor:
An act of honor is a legal agreement made between parties, usually involving a bill that has been protested. In the past, this agreement was documented by a notary public, but it is no longer used under the UCC. An act of indemnity is a law that protects government officials from penalties for acting outside their powers or illegally. It can also compensate individuals for damages caused by government actions.
A more thorough explanation:
An act of honor is a transaction in commercial law where a third person agrees to accept a bill that has been protested, for the credit of one or more parties. This agreement is memorialized in an instrument prepared by a notary public. However, the UCC has eliminated this type of transaction.
John owes $100 to Mary, but he cannot pay it back on time. Mary decides to take the bill to a notary public and get it protested. Then, she finds a third person, Tom, who agrees to accept the bill for John's credit. Tom signs an instrument prepared by the notary public, which memorializes his agreement to accept the bill. This is an act of honor.
The example illustrates how a third person can help a debtor by accepting a protested bill for their credit. This type of transaction is no longer recognized under the UCC.