Aval in Negotiable Instruments
Aval is a personal guarantee provided in favor of a party named in a negotiable instrument. While aval shares similarities with suretyship, it imposes a more stringent liability. The aval giver undertakes to pay the debt guaranteed by the aval. For instance, if the debtor of a check fails to pay the amount written on the check, the aval giver becomes responsible for the payment as if they were the debtor.
Aval may be placed on the front or back of the negotiable instrument or, if there is no space on the back, on an allonge. The commitment related to aval must include the phrase “for aval” or a similar expression on the instrument. However, a signature placed on the front of the negotiable instrument is also considered aval. If the aval giver does not specify for whom the aval is provided, it is deemed to be given for the issuer.
Even if the debt relationship for which the aval is provided becomes invalid for reasons other than non-compliance with formal requirements, the aval giver remains liable. In other words, even if the issuer has a valid defense against fulfilling the obligation, the aval giver’s liability continues. Therefore, the liability of the aval giver is independent of the primary debt. However, if the negotiable instrument violates validity rules, the instrument, and consequently the aval, become invalid.
The liability of the aval giver persists even if the negotiable instrument is transferred. The aval giver assumes the debt arising from the instrument as if they were the issuer.
The right to claim payment from the aval giver is not conditional upon prior recourse to the primary debtor. Thus, it is possible to demand payment from the aval giver without first addressing the primary debtor.
If the aval giver pays the debt, they acquire the rights arising from the negotiable instrument against the party for whom they assumed the obligation and against others who are liable under the negotiable instrument.