Bills of Exchange — Flashcards

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A bill of exchange is a written, signed, unconditional order by a creditor directing a certain person to pay a certain sum of money to a certain person or to bearer. It must be accepted by the drawee …

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The three parties are the drawer, drawee, and payee. The drawer writes the bill, the drawee accepts and pays it, and the payee receives the payment.

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The drawer is the person who draws or writes the bill. He is the creditor or seller who grants credit and signs the bill as maker.

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The drawee is the person on whom the bill is drawn. He is usually the purchaser or debtor, gives acceptance by signing the bill, and becomes liable to pay on the due date. In a cheque, the drawee is a…

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The payee is the person to whom payment is to be made. He may be the drawer himself, or a third party if the bill is discounted or endorsed.

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A promissory note is a written, signed, unconditional promise by the maker to pay a certain sum of money to a certain person or to order. It has only two parties: maker and payee, and it does not requ…

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A cheque is a bill of exchange drawn on a specified banker and payable only on demand. It has three parties: drawer, drawee who is always a bank, and payee.

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A cheque is always drawn on a bank and payable only on demand. An ordinary bill of exchange may be drawn on any person, including a banker, and may be payable after a specified time. A cheque need not…