16/09/2015
Abdulrahman Almuhrij: commercial papers were first imposed by the commercial environment, and then regulated by laws
abdulrahman bin mohammed Al-muhrij, lawyer, legal consultant has indicated that commercial papers has not been invited by roles or regulations, but were imposed by the commercial environment since it became customary for merchant to use them along with money to settle their commercial dealings. Different regulations were set later on to guarantee using commercial papers. All those topics were discussed in a lecture organized by the businesswomen committee at Ashrqia chamber of commerce in collaboration with Almuhrij law firm, all as a part of the program (know your rights). The lecturer discussed many topics related to commercial papers.
The lecture was shared through the internal television circuit of the chamber. Almuhrij said that people are familiar with three tools of commercial trading, which are trading, money and credit. Trading is to exchange one commodity with another commodity. While money was used to obtain commodities, which was soon found to be lacking in many aspects since merchants leaned on using credit instead. That led to inventing new ways to accommodate the market circumstances, thus, commercial papers were invented. Almuhrij explained that commercial papers are cheques written in specific formats, and can be traded commercially, it grants a certain amount of money that has to be paid either by viewing the cheque or in short term. And commercial papers are accepted as a valid payment method.
As for the types of commercial papers, the lecturer mentioned several kinds the (bill) while is the oldest type of commercial paper. It can be defined as "a cheque written in specific formats, and includes an order issued by a person called (the drawer), directed to another person called (drawee). That obligates the drawee to pay a certain amount when receiving the order, or on a certain date. The order can be negotiable to a third person”. It is clear that withdrawing this bill involves three people: (drawer): who writes the bill and signs it, which includes an order to pay, and (the drawee): to whom the order is sent, and the (beneficiary): to whom the paper that is being withdrawn, to the order and is the creditor of the value of the bill. The second type of commercial paper is (the bond order). It is a cheque written in specific formats, includes two parties, the (the editor) who vows to pay a certain amount of money on a certain date or a negotiable date, or as soon as the order is received. This money should be paid to another person (the beneficiary). This means only two people are involved in this process. The third type is the (cheque). a cheque written in specific formats, it includes an order issued by a person called (the drawer) to another person called (drawee) to pay a certain sum of money to a third person called (beneficiary) as soon as the ordered is received. , and it is clear that the check involves three people: the drawer: who is the editor of the check, and the drawee: and is often a bank to which the order of paying is sent, and the beneficiary, the person to whom the cheque is written. For the commercial paper to be valid, it has to be written in a draft that contains a specific information, which could be obligatory or optional.
AlMuhrij mentioned the features and advantages of commercial papers, which enables them to function as a substitute for money as well as being valid in trading. He said that amongst these features is that the commercial paper represents a certain amount of cash with specified amount and term. In addition, commercial papers can be traded either by (endorsement or liming), and commercial papers are usually paid in short-term are customary amongst traders. As for fulfilling commercial papers, it means paying the fixed amount in the paper for the holder in the due date which is usually specified in the bill if it was a bill or a bond order, and if it was a cheque, then it must be paid once it is received. Commercial papers should be fulfilled in the exact location that was stated in the paper. In addition, that the debtor has to commit to fulfilling the amount stated in the commercial paper.
AlMuhrij has also discussed the risks of issuing commercial papers and the protection measures for it. He mentioned that edited articles 118, 119, 120, 121, stated certain measures for protection. if someone wrote a commercial paper of fifty thousand, and failed to fulfil it, or signed it in a way that prevents it from being cashed, or if he ordered the beneficiary of not cashing the cheque, would get either a fine and jail time that does not exceed three years. Moreover, if the accused repeated any of these felonies within three years of the date of issuing the sentence, the sentence will change. The jail time would be extended to no more than five years and a fine of no more than a hundred thousand riyal. It could be these two penalties or one of them. At the end of the lecture, Issa Al-Dossari, assistant of the secretary general of the participant has gave the speaker a commemorative trophy.
