Legal Definitions - go to protest

To "go to protest" is a legal term used in commercial law, specifically concerning financial instruments like checks, drafts, or promissory notes. It means that such an instrument has been formally presented for payment or acceptance but was refused, a situation known as "dishonor." When an instrument "goes to protest," it triggers a formal legal process where a notary public or another authorized official creates a document (the "protest") certifying that the instrument was presented and explaining the reason for its dishonor. This formal protest is a crucial step for the holder of the instrument to preserve their legal rights against other parties who might be responsible for its payment.

Here are some examples illustrating this concept:

• International Trade Draft: An exporter in Brazil ships a large consignment of coffee beans to an importer in Italy. To facilitate payment, the Brazilian exporter draws a "bill of exchange" (a type of draft) on the Italian importer's bank, instructing the bank to pay a specific sum upon presentation of the shipping documents. When the bill of exchange is presented to the Italian bank, the bank refuses to accept or pay it, perhaps due to a dispute over the goods or insufficient funds from the importer. In this scenario, the bill of exchange would "go to protest." This means a notary public in Italy would formally certify that the bill was presented and dishonored (not accepted or paid). This formal protest document is vital for the Brazilian exporter to pursue legal claims against the Italian importer or any other parties liable on the bill.
• Promissory Note with Endorsers: A startup company issues a promissory note to an investor, promising to repay a loan by a specific date. The note is also endorsed by the company's founders, making them secondarily liable for the debt if the company defaults. On the due date, the startup company fails to make the payment. The investor presents the note for payment, but it is refused. To preserve their rights against the founders (the endorsers), the investor would have the promissory note "go to protest." A notary public would formally document the presentation of the note and the startup's failure to pay. This official protest serves as proof of dishonor and is a necessary step before the investor can legally demand payment from the founders.