(1)A creditor or owner shall not take a negotiable instrument, other than a bank note or cheque, in discharge of any sum payable—
(a)by the debtor or hirer under a regulated agreement, or
(b)by any person as surety in relation to the agreement.
(2)The creditor or owner shall not negotiate a cheque taken by him in discharge of a sum payable as mentioned in subsection (1) except to a banker (within the meaning of the M1Bills of Exchange Act 1882).
(3)The creditor or owner shall not take a negotiable instrument as security for the discharge of any sum payable as mentioned in subsection (1).
(4)A person takes a negotiable instrument as security for the discharge of a sum if the sum is intended to be paid in some other way, and the negotiable instrument is to be presented for payment only if the sum is not paid in that way.
(5)This section does not apply where the regulated agreement is a non-commercial agreement.
(6)The [F1Treasury] may by order provide that this section shall not apply where the regulated agreement has a connection with a country outside the United Kingdom.
Textual Amendments
F1Word in s. 123(6) substituted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services Act 2012 (Consumer Credit) Order 2013 (S.I. 2013/1882), arts. 1(1), 7(10)
Marginal Citations