“WITHOUT RECOURSE” CLAUSE IN THE CONTEXT OF FORFAITING OF THE BILL OF EXCHANGE

Abstract

As an export financing technique, forfaiting is most often reflected as a transfer of a bill of exchange or promissory note. One of the key features of forfaiting is the exclusion of liability of the transferor (seller of receivables) for the collection of receivables. In a situation where the object of the forfaiting is a claim contained in the bill or note, the exclusion of the transferor’s liability for the collection of receivables is ensured by entering a clause “without recourse”. The provisions regulating the bills of exchange and promissory notes differ in terms of the validity of the “without recourse” clause. The exclusion of recourse liability for bill of exchange (promissory note) in some legal systems is reserved for a wider range of recourse debtors, while in some legal systems the circle of obligors that can use this clause is narrower. The scope of the “without recourse” clause significantly affects the technique of creating a bill/note for the purpose of forfaiting. Therefore, the author in this paper analyzes the scope of the aforementioned clause in certain legal systems in the context of forfaiting the bill/note. The author’s idea is to notice what are the shortcomings of current solutions of comparative legal systems, and to examine how they are reflected in the forfaiting contract. The aim of the paper is also reflected in the author’s efforts to find a practical solution for eliminating the negative consequences of the limited scope of the “without recourse” clause in the current legal environment. Finally, the idea of the author consists in finding an adequate proposal for the pro futuro improvement of the current state of both domestic and comparative legislation, all with the aim of encouraging further growth and attractiveness of forfaiting.