This section of the book is from the "Canadian Banking Practice" book, by John T. P. Knight.
Question 83.— (a) A bill of exchange is drawn by a firm in London, England, on a merchant in Canada, in sterling, at sixty days' date, to be paid at maturity at the current rate of exchange. When this bill falls due what rate of exchange should be taken in converting it into our currency ?
(6) In the event of there being a difference between the sterling rates of the presenting bank and the bank at which the bill is made payable, could the latter bank tender the holder of the bill in payment a demand draft on London, England ?
Answer.—(a) See answer (1) to question 82.
(b) A bill drawn on a party in Canada, payable in sterling money, can only be paid in lawful money of Canada. The holder is not bound to take a draft on London. The obligation is one which the acceptor must meet in legal tender money, which, of course, a draft on London is not. Any dispute as to the rate must be settled just as other similar disputes are settled, in the last resort in a court of law.