Re-exchange Law and Legal Definition

Re-exchange is the expense incurred by the bill being dishonored in a foreign country, in which it was payable, and returned to the country in which it was made or indorsed, and there taken up. The amount of it depends on the course of exchange between the two countries. [Pavenstedt v. New York Life Ins. Co., 203 N.Y. 91 (N.Y. 1911)].

The basis of re-exchange is indemnity to the holder of the bill for the loss he sustains by the failure of the drawee to pay him the amount at the time and place and in the money called for in the bill. It is not founded on failure to accept, but on failure to pay. [Furness, Withy & Co. v. Rothe, 286 F. 870, 872 (4th Cir. Va. 1923)].