A person who refuses to pay or to accept a draft drawn on him is said to have "dishonored" it. The drawer, of course, must make good any drafts he has given to any one which have been dishonored. When a draft is dishonored the holder is entitled to immediate payment from the drawer or indorsers, even though it may not be due for months or years. The drawer and indorsers must be notified either orally or in writing that the draft has been dishonored, and steps must be taken within the same day to give them the notice they are entitled to receive. Drawer or indorser may waive the requirement of notice. But a failure to notify them, unless they waive their right, will discharge them, except as against a later innocent purchaser (one who did not know the bill had been dishonored).

Standard "Notice Of Dishonor" Form Used By Notaries

Chicago, I11., Sept. 11, 1921.

Please To Take Notice that a draft drawn by Ralph Lyle for $1,000 and interest, dated July 10, 1921, payable at the Union National Bank, Sept. 10, 1921, and indorsed by you, has been dishonored, payment having been duly demanded at its maturity and refused, and that said draft has therefore been Protested for non-payment and that the holders look to you for payment thereof, and of all damages, costs and charges thereon.

Yours very truly,

Wilbur Collins, Notary Public,

Union National Bank.

To Norman Spaulding.

Notice Of Dishonor

The notice of dishonor may be in writing or oral, and may be given personally or through the mails. It may be quite informal, and is sufficient if it fairly identifies the draft and indicates that it has been dishonored. The notice may be given by the holder or any one who would be liable to the holder and who upon taking it up would have a right of reimbursement from the party to whom he gives notice. The holder or other person may give the notice personally or it may be given in his behalf by some one else.