Commercial Papers (Cheques) in Commercial Transactions

First: What Commercial Papers Are

Commercial papers are:

Written legal instruments representing a monetary right, negotiable, and payable immediately or on a specified date.

🔹 In simpler terms:

They are a legal means that enables a merchant to:

• Defer payment

• Or transfer the financial right to others easily

⚖️ Second: The Legal Basis

The legislature defined them in Article 447 of Qatari Commercial Law No. 27 of 2006 as:

Written instruments representing a sum of money, negotiable, and payable on sight or on a specified date.

📌 This definition reflects their essential characteristics:

• Writing

• Monetary nature

• Negotiability

• A specified maturity date

🧾 Third: The Legal Forms of Commercial Papers

The main forms are:

1. The bill of exchange

• An order from the drawer to the drawee to pay a sum to the payee

2. The promissory note

• A direct undertaking by the debtor to pay a sum to the creditor

3. The cheque

• An instrument of immediate payment drawn on a bank, whose return for insufficient funds carries legal consequences addressed in the article on bounced cheques under Jordanian law

4. The bearer bond

• Payable to its bearer

📌 Important note:

These forms are not exhaustive; other forms may be created if they are customarily used among merchants.

💼 Fourth: The Functions of Commercial Papers

They play a pivotal role in the economy, and their most important functions are:

1. An instrument of payment

• Used to settle debts instead of cash

2. An instrument of credit

• Allows payment to be deferred (such as the bill of exchange; the validity, enforcement and signatories' liability of promissory notes (kimbiyala) under Jordanian law are addressed in a separate article)

3. An instrument of circulation

• Can be transferred easily from one person to another

4. An instrument of financing

• Can be discounted with banks to obtain liquidity

⭐ Fifth: The Advantages of Commercial Papers

They have characteristics that make them strong and effective:

✔️ 1. Formality

They must contain mandatory particulars, otherwise they lose their commercial character

✔️ 2. Self-sufficiency

• They prove the right by themselves

• They do not need a contract or an external document

✔️ 3. Ease of circulation

• They are transferred by endorsement or delivery

✔️ 4. Speed and credit

• They save time and support commercial trust

⚖️ Sixth: The Governing Legal Rules

1. The principle of formality

The paper must contain:

• The amount

• The maturity date

• The signature

❗ If these are missing:

➡️ It becomes an ordinary instrument subject to the Civil Code

2. The principle of self-sufficiency

The right derives from the paper itself, not from the underlying relationship.

3. Independence of signatures

• Each signatory is independently liable

• The invalidity of one signature does not affect the other signatures

📌 Example:

If the signature of one of the endorsers is void, the obligation of the others remains valid.

4. The principle of decisiveness and strictness

• The debtor cannot easily evade payment

• The obligation is clear and definitive

📊 Seventh: The Legal Effects of Their Use

🔹 1. Strengthening trust

• They reduce risk between merchants

🔹 2. Facilitating transactions

• They replace direct cash payment

🔹 3. Guaranteeing payment

• They provide strong legal protection for the creditor

🔹 4. Accelerating the economic cycle

• They move money quickly within the market

🛡️ Eighth: Legal Protection

Commercial papers enjoy special protection, such as:

• High evidentiary force

• Fast enforcement procedures

• Strict legal liability on the debtor

📌 The reason:

Because they are the backbone of trust in commercial transactions

Commercial papers are advanced legal and financial instruments that balance speed and credit, and they are a foundation of stability in commercial transactions, thanks to their legal force and ease of circulation.

First: Mandatory Commercial Books

Article 16 of the Commercial Law requires three main books to be kept:

1. 📖 The journal

• The merchant records all daily transactions in it

• It includes:

  • Commercial operations

  • Personal and family expenses (monthly)

👉 The purpose: to document financial movement daily and accurately

2. ✉️ The letter-copy book

• It includes:

  • Copies of outgoing letters and telegrams

  • Retention of incoming letters

👉 The purpose: to prove commercial correspondence in a dispute

3. 📊 The inventory and balance-sheet book

• Prepared at least once a year

• It includes:

  • An inventory of holdings (assets)

  • Liabilities (debts)

  • The financial position

👉 The purpose: to know the merchant's true financial position

🧾 Second: How the Books Are Kept

Under Article 17 of the Commercial Law:

The books must be:

• In chronological order (by date)

• Free of:

  • Blank spaces

  • Scraping or erasure

  • Insertions between the lines

👉 The purpose: to prevent tampering and ensure credibility

🔢 Third: Certification of the Books

Article 18 of the Commercial Law provides for:

• Numbering the books

• Their signing and stamping by the Commercial Register Controller

👉 The purpose: to give them official status and legal authority

⏳ Fourth: How Long the Books Must Be Kept

Under Article 19 of the Commercial Law:

• They must be kept for 10 years

👉 The purpose:

• To refer to them in a dispute

• To protect financial rights

⚖️ Fifth: Submitting the Books to the Court

1. Full submission of the books

Under Article 20 of the Commercial Law:

The books are submitted in full in cases such as:

• Inheritance

• Division of jointly owned property

• Company

• Bankruptcy

• Preventive composition with creditors

👉 Because the dispute covers the entire financial activity

2. Partial submission of the books

Under Article 21 of the Commercial Law:

• It is possible to:

  • Present only part of the books

  • Or compel the merchant to produce them

• And the judge may:

  • Order this on the judge's own initiative

👉 The purpose: to extract only the evidence related to the dispute