Bills Defense Legal System

In order to balance the relationship between rights and liabilities on negotiable instruments, restrict creditor on instrument of abuse of rights and alleviate pressure of debtor for instruments that isn't fair, it comes to the theory and system of defenses to instruments from long-term development and practice of instruments law.Defenses to instruments can be made a study of in two facets: rights to defenses to instruments and act of defenses to instruments. Rights to defense and defenses action is the outside and inside mutually, and rely on each other. Rights to defense mean debtor on instruments or one without liability for instruments, according to legal reason, has rights to be against creditor on instruments or holder without right on instruments. Debtor and one without liability could be summed up "persons to be requested to cash instruments"; creditor and holder without right could be "holder". Based on influence to holder, defenses to instruments could be divided into right to delay and right to refuse. As far as legal attribute is concerned, right to delay is right of formation, while right to refuse isn't. Defenses action resulting from right to delay is juristic action, while defenses action from right to refuse isn't.The function of defenses to instruments is its effect and influence in instruments law system, and it embodies rationality of defenses. First, it establishes the possibility of defenses from basic instruments relationship; secondly, it balances the relationship between creditor and debtor on instrument, denies the claim from holder without right and protects the legal rights and interests of person without liability on instruments; thirdly, it promotes instruments system to be in harmony with economy system and perfect instruments law system.Defenses to instruments are special law while defenses in civillaw are general law. The two kinds of defenses have great difference due to techno-characteristic in instruments law. Speaking of defenses in civil law, it means defenses in narrow sense, but defenses to instruments refer to ones in broad sense. Defenses in civil law could be continued, however, defenses to instruments could be cut off.The legal idea of defenses to instruments system embodies the idea of civil and commercial law system, that is to say, based on protecting efficiency and safety of transactions, defenses to instruments aim at fair and justice. The same reason as the restriction to defenses comes into being. From the point of view of legal value, defenses are justice's emendation to safety. From the point of view of economic analysis, defenses could promote instruments resources to be made best use of and realize the utility maximum of instruments.In civil law family and Anglo-American law family, defenses to instruments are different. Based on reason to defenses, in civil law family, defenses to instruments are divided into "defenses based on instrument itself" and "defenses based on person". The regulation of defenses to instruments in America (Uniform Commercial Code) is based on the concept "holder in due course". According to the extent which holder is subject to defenses, in America instruments law, defenses to instruments are divided into "real defenses" and "personal defenses". The essential difference in two instruments law family is as follows: first, there isn't the concept "holder in due course" in civil law family; Secondly, defenses in civil law family focus on strictness of instruments action; thirdly, in Anglo-American law, it pays attention to the remedy of holder after someone exercises defenses right. Last, in Anglo-American law, it focuses on protecting holder in due course, at the same time, it pay attention to debtors' defenses right in the case of "Fraud", "Duress" and "Illegality of the transaction", eventhey could be good against holder in due course.Restriction to defenses to instruments, also named defenses cut off. It purports to reduce transactions risk and promotes instruments negotiation. Abstract act feature of instruments is the theory base of restriction to defenses. Restriction to defenses mainly include: 1.Debtor for instruments may not set up against the holder such defenses that are available as between himself and drawer or between himself and the holder's prior parties; 2. Restriction in instruments apparent representation and; 3. Bona fide purchase of instruments from holder without right to endorse it could also result in restriction to defenses. The exception of restriction to defenses refer to defenses to instruments couldn't be cut off under some special circumstances.Surety on instruments has a special position compared with other people exercising act of instruments. Right to defenses of surety and debtor is comparatively different. Right of surety could also be divided into "defenses based on instrument itself" and "defenses based on person".The instruments theory and legislation in China get great effect from civil law family. If we want perfect instruments legislation, to make a further study of instruments law theory is absolutely necessarily.