Bearer Instruments and the New Civil Code

Law nº 10406, of January 10, 2002, which introduces the new Brazilian Civil Code to be effective early next year (as of January 11, 2003), once again includes in our legal system the possibility of bearer instruments being issued, so long as the transaction is duly authorized by special law¹.

Like the old Civil Code (Law nº 3071, of January 1, 1916), the new Code also allows three kinds of instruments:

1. bearer instruments, transferable by simply handing them over (physically) to the other party. This kind of instruments does not contain the name of the beneficiary, be it because it has the word "bearer" on them or because the name of the beneficiary or borrower (holders) of such instruments is not indicated;