Legal Definitions - sight

In commercial law, particularly concerning financial instruments like drafts or bills of exchange, sight refers to the moment when the party ordered to pay (known as the drawee) formally agrees to honor the payment request. This act of agreement is called acceptance. Therefore, when a payment instruction is described as "payable after sight," it means the payment becomes due a specified period after the drawee has accepted the obligation, rather than immediately upon its initial presentation.

• Example 1: International Trade Finance

  A clothing retailer in Canada orders a large shipment of textiles from a manufacturer in India. To manage cash flow, the manufacturer issues a bill of exchange to the Canadian retailer's bank, stating it is "payable 90 days after sight."

  Explanation: The "sight" occurs when the Canadian retailer's bank (the drawee) formally reviews and accepts the bill of exchange, agreeing to pay the manufacturer. The 90-day payment period then begins from that specific date of acceptance, giving the retailer time to receive and inspect the textiles before the bank releases the funds.

• Example 2: Commercial Real Estate Transaction

  A developer is purchasing a parcel of land and provides a promissory note to the seller, which includes a clause stating that a final installment of the purchase price is "due 30 days after sight" of the completed environmental impact report.

  Explanation: In this context, the "sight" refers to the developer's (the drawee's) formal acceptance or acknowledgment of having received and reviewed the completed environmental impact report. Once the developer accepts the report, the 30-day countdown for the final payment begins.

• Example 3: Supply Chain Payment Terms

  A large electronics company uses a specialized payment arrangement with its component suppliers. One such arrangement specifies that payment for a batch of custom microchips is "Net 45 after sight" of the quality control inspection report.

  Explanation: The "sight" here is the moment the electronics company (the drawee) formally accepts the quality control inspection report, confirming the microchips meet their standards. The 45-day period for payment then starts from that acceptance date, not from when the chips were shipped or the report was initially generated.