payment order in electronic funds transfer (eft) as a negotiable instrument: a comparative study

payment order in eft can be a negotiable instrument in two ways; it can be an instrument based on custom and regulation meaning that whether it should be considered as new instrument or be incorporated 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 be created by custom because some characteristics of these instruments are opposed to the general rules or third party rights while acts or regulations can only do it. given the second situation, creating a new instrument by regulation must be done by taking a special name, stating its conditions, characteristics 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. on the other hand, in iranian law payment order is a special instrument having 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, the bankd is oblige to perform. this in turn, creates this principle in our mind: unacceptable defense principle. nevertheless, we cannot ignore some bad consequences of this idea that led us to reject this framework for payment order.