II General Law and Negotiable Instruments: A Brief Historical Perspective

Subject(s):

International financial law — Debts — Exchange controls — Sources, foundations and principles of international law

This chapter explores the evolution of negotiable instruments as a cross-border migration of ideas, challenges of innovation and progress, and sophistication of legal doctrines, principles, and concepts. There are common themes to the evolution of the various negotiable instruments in different eras in diverse places. They point to a common denominator in issues and solutions, rather than to the existence of ‘foreign’ or ‘imported’ legal principles and concepts into each legal system to shape the law of these instruments. First, needs of commerce and available technology, rather than interests of rulers and states, have continuously shaped this evolution in each era and locality and under each legal system. Second, each of the three instruments—the bill, cheque, and note—evolved on its own, within its own domestic legal system. There has not been a universal ‘law merchant’ under which governing principles evolved and moved from one system to another. Third, autonomy of parties has been an underlying factor in each legal system in facilitating the development of obligations under each instrument and the law applicable. General principles of contract and property have been the building materials in the construction of this law. Fourth, in the development of the instruments and the law governing them, the emergence of ‘negotiability’, and its evolution into a unifying factor in a body of law governing them, is quite late.