Payment Order in Electronic Funds Transfer (EFT) as a Negotiable Instrument with a Comparative Perspective

Payment order in EFT can be a negotiable instrument in two ways; it be as such an instrument based on custom and regulation meaning that whether it should be considered as new instrument or incorporates in one of the current instruments. In light of Iranian legal system and against Common law it is not acceptable that a new negotiable instrument can be created by custom because some characterizes of these instrument are opposite of the general rules or third party rights while Acts or regulations can only do it. About the second situation, creating a new instrument by regulation must be done by taking a special name, stating its conditions, characterizes and results. Although the related regulations like UCC or By-law for Issuing a Payment Order and Fund Transfer have tried to mention these requirements notwithstanding, under Common Law no custom or rule confers the character of negotiability to payment order and therefore we cannot consider it as a new negotiable instrument. In front of this, In Iranian law payment order is a special instrument having owns conditions and results in the light of the given By-law. Therefore the obligation created by this instrument is definite and after having issued and accepted by debtor who is bank, it will oblige the bank to perform. This in turn, brings this principle in our mind: unacceptable defense principle. In any way, we cannot ignore some bad consequences of this idea that led us to reject this framework for payment order.