​KembaraXtra – Legal Terms – Payment in Due Course


Payment in due course refers to payment made on a bill of exchange by the payer in good faith and without knowledge of any defect in the holder’s title.


The payment must be made at or after the maturity date of the bill.


Where payment in due course is made by or on behalf of the drawee or acceptor, the bill is discharged.


The payer must act honestly and without notice that the holder obtained the bill improperly or unlawfully.


If the bill is paid by a drawer or endorser instead of the acceptor, the bill is not discharged and the paying party may still exercise rights under the bill.