TeachMeFinance.com - explain Protest
Protest -- 1. (USA) The procedural means by which an importer, consignee, or other designated party may challenge a customs decision.
Protest -- A notarial certificate that a promissory note or bill of exchange has been presented for acceptance or for payment and that acceptance or payment has been refused. On the day of the maturity of a note or bill of exchange (the day on which payment is due) or the day on which a bill of exchange should be presented for acceptance the notary, with the instrument in his possession, must present it at the place where it is payable or where acceptance is to be made and on refusal or failure to obtain payment or acceptance he must notify in person or by mail the indorsers (in case of a bill of exchange that is without indorsement he must notify the drawer). If no place of payment in the case of a bill or note calling for payment is mentioned in the instrument it must be presented at the place of business of the payer (the one who is to pay it) ; if there is no such place of business then it must be presented at the payer's place of residence. When a draft or note is not paid at maturity and it is formally protested and so inscribed this step establishes a basis of proceeding by law for the collection of the amount of it. When an indorsed draft or note is protested a demand for its payment may be made upon the indorser. The amount of a protest fee is added to and becomes part of the principal. Interest continues on the whole until payment of the note is finally made. The effect of a protest is to prevent the release of the indorsers on an instrument. Such parties are discharged if the instrument is not protested. When a bill has been noted the protest may be extended as of (back to) the day of noting. The protest should be commenced on the day on which acceptance or payment is refused, but it may be drawn up and completed at any time before the commencement of suit or even before or during trial and be antedated accordingly. If a bank holds for collection a check which has been allowed to go to protest and if the drawer afterwards makes a sufficient deposit to cover the check, without specific instructions, the bank may apply the deposit to the payment of the check. The authority of the bank to make the collection continues, the maker of the check has not revoked the authority to pay contained in it, he has made a general deposit without any instructions as to the disposition which is to be made of it and every element is present which is necessary to confer upon the bank a right to honor the check.
About the author
Copyright © 2005 by Mark McCracken, All Rights Reserved. TeachMeFinance.com is an informational website, and should not be used as a substitute for professional financial or legal advice. TeachMeFinance.com and its owner recommend consultation with a professional financial advisor prior to any investment or financial decision. Please read our disclaimer.