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Why have I received my invoice back?

Apparently this is a bill of exchange!

As a private consultant in the UK, a private client was billed for services rendered by my consultancy firm.

I received the invoice back from the client with a restricted endorsement stating that this act was recognised under UK and International Law

and that the "sum certain has been discharged"

Has anyone come across this before?

Thanks Anthony

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11th May 2017 21:34

You don't mention whether you have received payment of your invoice. If you have, or if payment is still in transit to you, my best guess is that the document you have received is, in effect a remittance advice.

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to johngroganjga
12th May 2017 13:24

Hello John,

Thanks for responding. I have not received payment, just the original invoice back. On the body of the invoice, the client has written by hand Without Recourse and signed it below. On the bottom of the invoice he has written by hand; Pay to the Order: Heston and Heston.

I was informed by someone else on a similar forum that if I inform the client that I do not accept this form of payment that the law protects him and the obligation is discharged as he put it. I was also told that what the client has done is convert my invoice into a Bill of Exchange which is apparently recognised by English law.

In essence, I am attempting to avoid an embarrassing situation at the bank and in my industry.

If you could offer any suggestions about how I could resolve this, it would be much appreciated.

Anthony

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to AnthonyHeston
12th May 2017 22:42

A bill of exchange is an order in writing, addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand, or at a fixed or determinable future time, a sum certain in money, to, or to the order of, a specified person or to bearer.

So if this document is a bill of exchange it must say to whom it is addressed - i.e. who it is who is required by the bill to make payment of your invoice to you. If it doesn't it is a pointless document, and it is certainly not a bill of exchange.

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to johngroganjga
13th May 2017 07:55

Hi John;
1. The bill is addressed from my firm to the client.
2. Based on the legislation I have been reading, it appears that the client has converted it into a bill of exchange and seems to match all the criteria you have listed above. The question becomes.....what do i do at this point?

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to AnthonyHeston
13th May 2017 08:11

Oops posted twice, so deleted one.

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to AnthonyHeston
13th May 2017 08:53

On the basis we cannot see it to confirm whether or not it is a bill of exchange i suggest you speak to your business banker and ask them to put you in touch with their foreign department who can process it, if indeed it is such. Although you can only do this if you have a non ex building society bank, so perhaps one of the old big four who still have a decent foreign department and a non numpty business manager. Usually the decent bank managers are at corporate level. Bear in mind you can actually issue a legally binding cheque on the side of an elephant, but that doesn't mean a bank will process it for you! Have you asked your numpty client why they are doing such foolish things in this day and age, when there really is no commercial need?Suggest that's your first port of call. Or just knock on his door to present said paper for payment.

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to Cheshire
13th May 2017 11:41

Hi Cheshire,

I posed this question to my (soon to be ex) client and his response was and I quote "the law made provisions for me to do so and until the law changes the indorsement stands". Therefore before I choose to challenge the actions of the client, I would like to get my facts straight....and by the way thank you for providing me with the legislation you did.

On the topic of foreign exchange departments, could you list for me the big four your are referring to and if you have a business manager you can recommend, i would very much appreciate it.

Anthony

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to AnthonyHeston
13th May 2017 15:39

In that case it's quite simple. You present it to the person to whom it is addressed (you did not mention previously that it was addressed to anybody, and you have not said who the addressee is - presumably a bank?) and claim the money it orders that person to pay you.

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to johngroganjga
13th May 2017 16:36

I suggested that earlier John ...when I said about knocking on the clients door I was serious, but I think the OP missed that, although it does depend on what else has been added to the doc that we don't yet know about. Edited to add - Although I've just read your post again and see what you are suggesting, yes an option. Problem is we don't know what is actually on the document in full, as yet

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to johngroganjga
16th May 2017 07:12

Hello John,

The invoice was addressed to my client (i'm sure I mention this at the outset) therefore the addressee would be the client.

The hand written pay order is made out to my organisation; Heston & Heston however when you say "claim the money it orders" how?

I presented it to the bank cashier yesterday and she informed me that the bank does not accept this! However after reading that Bill of Exchange Act three times it clearly states that the bank is suppose to accept it!

Anthony

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to AnthonyHeston
16th May 2017 08:49

AnthonyHeston wrote:

Hello John,

The invoice was addressed to my client (i'm sure I mention this at the outset) therefore the addressee would be the client.

The hand written pay order is made out to my organisation; Heston & Heston however when you say "claim the money it orders" how?

I presented it to the bank cashier yesterday and she informed me that the bank does not accept this! However after reading that Bill of Exchange Act three times it clearly states that the bank is suppose to accept it!

Anthony

Of course the bank cashiers are going to reject this, they have no flipping clue about anything at branch level these days, cant even fill a basic form in never mind know anything at this level. Plus they frankly don't give a damn!

That's why I said you needed someone at the internation level, especially at that poxy bank!

Frankly if you had responded to the posts over the weekend we could've saved you some time.

Does the annotated document have your customers BANK details on it? Or do you know what they are? If yes speak to your relationship manager (that's what they are there for!!!!) and he can show it to the international guys to check if it is indeed a Bill of exchange or indeed a promissory note or indeed a wast of space scrap of paper. If it doesn't have your clients bank details then do as John and I have already both suggested. (redaction of yours and your clients info wouldnt have that difficult to do to get an informed opinion (I'm an ex corporate financier with substantial international trade experience) but I don't think you can post pics on here,although had you been back on some of the other forums you could have had an answer days ago. Sure your rel mgr will sort it, if not change banks!

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to Cheshire
17th May 2017 06:32

Hello Cheshire,

Thank you for your input as always.

"That's why I said you needed someone at the internation level, especially at that poxy bank!"

1. I am unsure about what proxy bank is. I looked up the term, but seems puzzling to me.

2. I don't know what you mean by "International Level" at a bank! I know you are speaking from experience, but for the novice, could you speak with words and terms like you would to a 5 year old, please.

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to AnthonyHeston
17th May 2017 18:23

Poxy bank, not proxy. Ie crap Lloyds are not known for their international prowess. Anyway that is the Bank you have chosen and so who you are stuck with.

So before I look at the other questions, - have you approached your relationship manager at Lloyds? Have you ask him to put you in touch with someone from their international department? He should know exactly what you mean by that.
Or phrase it another way - tell him you want to speak to someone who knows what the hell they are doing with bills of exchange/documentary collections and documentary credits because then you should get through to someone who can look at the piece of paper you have got and determine exactly what it is and what to do next with it.
If you havent done that - do it NOW. If you have done it and the relationship manager fobbed you off, ring them back NOW and dont take no for an answer or speak to their boss!!!!!!
International department is the department that deals with imports and exports (I know it sounds like it might not impact on you, but they deal with BILLS OF EXCHANGE all the time, including bills and documentary collections WITHIN the UK)

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to Cheshire
19th May 2017 11:20

Hi Cheshire,

Thank you for taking the time in proving an in depth response.

I also apologise for not getting back to you as I was dealing with a family issue.

I will follow this up on Monday and update you as progress takes place.

A.H

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to Cheshire
17th May 2017 06:38

Does the annotated document have your customers BANK details on it? Or do you know what they are?

1. The annotated document has a National Insurance Number on it....I did not know this until a few days ago, however there is no indication that the clients bank details are on the invoice.

2. I don't know what the clients bank details are.

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to Cheshire
17th May 2017 06:41

"although had you been back on some of the other forums you could have had an answer days ago"

1. Could you provide names of other forums, as the ones that i have tried have not been successful"?

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13th May 2017 08:49

This little piece has appeared in several places on the inter-tubes, although the wording I have seen elsewhere doesn't mention an invoice at all, just a bill of exchange.

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to Cheshire
12th May 2017 13:27

Hi Cheshire,

I did post this question on other forums for the purpose of making an informed decision. I apologise if this post was delivered to you in the form of spam as it was not my original intention.

Anthony

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to AnthonyHeston
13th May 2017 00:24
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to Cheshire
13th May 2017 08:03

Thanks Cheshire,

I was looking at this document last night. I found it very informative.

It appears that the client has exercised several sections of this act! Based on my understanding, it looks like i would have to exercise section 45 - Rules as to presentment for payment.

Any thoughts?

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to AnthonyHeston
13th May 2017 08:24

Trouble is, some of us on are on other forums so can see the dumping of info, plus on one particular site we can see the time you joined and the time you posted so you clearly didn't spend any time trying to search the site, hence why you got no help on there as that's exactly what the spammers do. Plus you seem to have used copy and paste, although you haven't actually copied all of the information to all of the sites. A few more seconds thinking through an initial post, giving fuller facts usually helps people provide a better answer. Note, on the sparse information given this could actually just be a promissory note. Don't waste any more time asking folk to play a guessing game, get a qualified trade specialist to look at the document for you (after speaking to your client!)

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to Cheshire
13th May 2017 11:47

Hi Cheshire,

When the occurrence took place I contacted my accountant who I have to be honest wasn't much help! My instinct was to reach out to perhaps more experienced individuals to get a better grip on the situation...hence my copy and past approach to save time. I apologies in advance if this offended you in any way as I mentioned before this was not my intention.

If there are any further facts you require I would be happy to provide as long as the client confidentiality agreement i have is not violated.

Could expand on what you mean by qualified trade specialist?

Anthony

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12th May 2017 16:51

Don't count on this, but I think a bill of exchange is the original term for what eventually developed into cheques drawn on recognised banks.
Do you recognise your client as a bank? I suspect not. He's obviously too sharp for his own good.

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to Red Leader
12th May 2017 22:35

I believe that the most elegant definition of a cheque is indeed that it is a bill of exchange drawn on a bank.

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to Red Leader
13th May 2017 08:08

Hi Red Leader,

I appreciate the input.

Another member of this forum provided a copy of the legislation on this matter.

While browsing through it I noticed that there was a separate section for cheques and anther for Bills of Exchange...therefore I can only surmise at this point that there is a distinction between the two instruments.

Thank you all the same.

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to AnthonyHeston
13th May 2017 08:36

Their certainly is a distinction between them, although the cheque originally derived from the bill of exchange, but there is actually so much more you can do with a bill of exchange, but there are key points in the process that need to be followed, with great care.

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to Cheshire
13th May 2017 11:50

Hi Cheshire,

Very interesting post.

Could you explain what you meant by;

1. "there is actually so much more you can do with a bill of exchange"

2. "there are key points in the process that need to be followed, with great care".

Many Thanks Anthony

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13th May 2017 12:16

Sorry Anthony but I haven't got time to get into a rambling discussion about trade finance and bills of exchange as I'm actually working this weekend on my own clients stuff. I don't know that many Accountants who would necessarily have come across such things generally speaking unless perhaps they have customers with trade finance requirements. Note I don't say get in touch with a foreign 'exchange' department as, unless it's not in sterling you don't need currency exchanges, but you do need a good foreign/ trade finance department, as they will be used to seeing such documents, usually as part of imports and exports. To turn it back to you, given the time constraints (ie mine!) (1) which bank are you with and do you have a relationship manager at that bank? (2) does the so called bill have an expiry or indicate a pay by date (3) does the bill have the bank details to which it needs to be presented. Not sure if you can post a picture on here, but if you can then do so with redacted bits as necessary. Sorry for any typos, not got my glasses! Might think of some more questions later.

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to Cheshire
16th May 2017 07:25

Hello Cheshire,

(1) - I bank with Lloyds and I do have a relationship manager.

(2) - The so called bill states that the amount of £2,123.24 is due by June 5, 2017.

(3) - By the term "necessary bank details"...do you mean, have I provided my bank details on the invoice for the client to make payment at those coordinates? If so then the I would have to answer no as I tend not to publicises that information.

I would prefer not to post the invoice on a public forum, and yes if I did i would have to redact much of the clients details, not sure how to upload images on this forum.

A.H

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to AnthonyHeston
16th May 2017 13:08

Perhaps if you had bothered to quote your bank details on your invoice he would've paid you by now!

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to Cheshire
17th May 2017 06:50

"Perhaps if you had bothered to quote your bank details on your invoice he would've paid you by now"!

I have to disagree with you. I believe that even if I had quoted my bank details this client had no intention of settling with real funds.

I have been doing some reading over the weekend and it appears that what this client has done is attempt to perform a "discharge of obligation" against his National Insurance Account.

Whether there is any validity to the process, I cannot say at this point, however I wouldn't put it past this guy as he seems unhelpful but very astute.

I really would like some assistance from someone who has encountered this or something similar as banks, FCA and other similar entities seem to know little about this, even though the UK statutes recognise what this individual has done!

A.H

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to Cheshire
17th Sep 2017 09:34

Hi Cheshire,

Apologies for the response in getting back to you.
I sent the bill of exchange to the International Department of Lloyds who sent it back claiming that the verbiage on the bill was unspecific. Not sure where to go from here :( A.H

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17th Sep 2017 10:29

Without reading the long and lengthy discussion, the wording sounds like Freeman of the Land rubbish and someone is trying to avoid their liability.

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to thevaliant
17th Sep 2017 12:29

Hello thevaliant!

Have you read the wording? Because I had this check out by someone else and they said "its within the letter of the law".

A.H

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to AnthonyHeston
18th Sep 2017 11:39

AnthonyHeston wrote:

Hello thevaliant!

Have you read the wording? Because I had this check out by someone else and they said "its within the letter of the law".

A.H

Of course TheValiant hasnt read it - you havent posted it! (No dont, please dont. This is such a farce!)
The 'someone' who checked it out probably has no idea what they are on about!

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to AnthonyHeston
18th Sep 2017 11:47

Ask yourself one question:

Have you had payment in the form of either:

Cash, cheque, bankers draft, postal order or direct bank transfer?

If the answer is no, reply to the customer that you want payment within 7 days by one of those methods or else you will proceed to court without further recourse.

You are wasting time dealing with a joker, and wasting time asking for advice on this board and elsewhere.

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18th Sep 2017 11:31

"Without reading the long and lengthy discussion, the wording sounds like Freeman of the Land rubbish and someone is trying to avoid their liability."

Agreed.

Go directly to court.

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to Chris Smail
18th Sep 2017 11:41

Chris Smail wrote:

"Without reading the long and lengthy discussion, the wording sounds like Freeman of the Land rubbish and someone is trying to avoid their liability."

Agreed.

Go directly to court.

If this had gone to court all those months ago then the poster could have had his pound of flesh by now, or a CCJ!!! Or at least been told by the courts - you have no flaming chance of getting your wonga from this joker.

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to Cheshire
03rd Oct 2017 11:23

1. I am fine with going to court.

2. It will cost me to pursue this case.

3. How are you so sure I will come out victorious?

Its worth remembering that I have had this document checked out and it appears to be in line with the letter of the law.....so do you still suggest that I pursue this in court in light of the fact that the client has nominated me as a Fiduciary Trustee in a Private Express Trust and apparently converted the bill into a bill of exchange pursuant to the Bills of Exchange Act 1882 ?

In light of all that I have mentioned.....is it really clever to go to court considering I am dealing with someone who clearly knows the law and has responded according to law?

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to AnthonyHeston
03rd Oct 2017 12:50

Are you owed money?

Have you been paid?

The rest is nonsense.

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to Chris Smail
03rd Oct 2017 23:32

Hi Chris...i think you may be missing the point, meaning...how can the "rest be nonsense" if the law states that the bill of exchange is valid and is settled?

I read that act seven times and had a lawyer explain to me what the client has done and what it means.

Are you now saying that the law is nonsense?

Please explain.

AH

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to AnthonyHeston
04th Oct 2017 09:05

AnthonyHeston wrote:

I read that act seven times and had a lawyer explain to me what the client has done and what it means.

Silly question, but if someone who knows what they are talking about says it is valid, surely they must also be able to tell you what you should do next.

If they can't then maybe they don't know what they are talking about after all.

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to stepurhan
05th Oct 2017 03:24

Logic dictates that they should be able to.....however thieir only response was that "your bank should know what to do with it"!

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to AnthonyHeston
05th Oct 2017 09:44

AnthonyHeston wrote:

Logic dictates that they should be able to.....however thieir only response was that "your bank should know what to do with it"!

Logic dictates that they therefore don't know what they are talking about then.

You've read the act 7 times, and are also apparently sure it's valid as a result. Surely if you have understood the law well enough from reading the act 7 times, you should also know what to do with it. If you don't, perhaps you don't have the understanding of the law you think you do.

Because, if neither you nor your adviser can tell you how to turn this document into cash, it's just a piece of paper with legal gobbledegook on it.

We've tried to help, but all you're doing is saying you can't/don't dare do the things suggested. I think that is very foolish, but I'm not the one out of pocket for your foolishness, so it's no skin off my nose.

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to Chris Smail
03rd Oct 2017 11:15

What is Freeman on the Land?

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to AnthonyHeston
03rd Oct 2017 11:27

AnthonyHeston wrote:

What is Freeman on the Land?

https://en.wikipedia.org/wiki/Freemen_on_the_land
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to stepurhan
03rd Oct 2017 23:29

What does this have to do with my invoice?

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to AnthonyHeston
04th Oct 2017 08:59

AnthonyHeston wrote:

What does this have to do with my invoice?

Various people have said this sounds like Freeman of the Land nonsense. You specifically asked what a Freeman of the Land was. If you read the link, you would see that those claiming this status have not fared well in court. The relevance seems fairly clear to me.

It's almost like you don't want to be paid for this work. If you're willing to accept some legal gobbledegook written on your own invoice as settlement, despite so many people pointing out how that is ridiculous, why did you even bother asking the question?

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to stepurhan
05th Oct 2017 03:35

stepurhan wrote:

AnthonyHeston wrote:

What does this have to do with my invoice?

Various people have said this sounds like Freeman of the Land nonsense. You specifically asked what a Freeman of the Land was. If you read the link, you would see that those claiming this status have not fared well in court. The relevance seems fairly clear to me.

It's almost like you don't want to be paid for this work. If you're willing to accept some legal gobbledegook written on your own invoice as settlement, despite so many people pointing out how that is ridiculous, why did you even bother asking the question?

1. I read the link and it quotes how a certain group of people believe and operate in life.....In short the client has not made any claims of that nature or used the term "Freeman on Land".

2. If I didn't want to be paid for my work....why would I asked fr advise in an accounting forum, consult with solicitors and other professionals?

3. Why do you suggest that I am accepting "some legal gobbledegook written on your own invoice as settlement"......have I not made it clear that I read the act seven times......it states clearly in there that "the holder is suppose to write on the bill".

4. The reason I asked the question is because it was suggested that I contact the International Department of my bank to bank the instrument....however...the bank returned it as they had no idea where at Treasury to send it!

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to AnthonyHeston
05th Oct 2017 08:27

Reading an act 7 times does not make you an expert. Being a solicitor does not make that person an export in bills of exchange, clearly. Banking with a sh*te minimally internationally represented bank clearly makes them non experts. They should have at least guided you as to how to deal with this.

Coming on here acting like a typical business owner demanding answers for free doesnt get you anywhere other than getting people's backs up, especially when you have so very clearly prevaricated over this situation for 5 months.

What kind of consultant are you? What is your business?

Now as you state that a lawyer has looked over this then I am assuming he has taken due note of the law and regulations around such instruments, so as such I am going to assume that the document has a named drawee. As such the document should then have the address at which you present it for payment - usually the bank of the drawee (which is when the Bank does there 'thing' and the lack of such information is why the Bank cannot do their thing. But as I said earlier they very least they should have done is guide you as to what you need to do (and I am making a massive assumption here that those bods have actually confirmed whether or not it is indeed a bill of exchange!)

In case this field is left blank, the bill of exchange is payable at the address of the drawee.

If it does not have a drawee then it is not a bill of exchange!

So as I suggested at the top of this (and indeed I think John alluded to this) you go and knock on the door of the DRAWEE and present the bill for payment, in bloody person.

Given its not before the bills due date you really should not have a problem.

Failing that - take it to court.

Or stop wasting our time, stop moaning and write it off!

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