Bills Of Exchange — Flashcards

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A Bill of Exchange is a written instrument containing an unconditional order signed by the creditor (drawer), directing the debtor (drawee) to pay a certain sum of money to a specified person or to th…

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A Promissory Note is a written instrument containing an unconditional promise made by the debtor (maker) to pay a certain sum of money to a specified person or to the bearer. It does not require accep…

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The Drawer is the person who creates or draws the bill of exchange. He is usually the creditor who has sold goods on credit. For example, if Radhika sells goods to Madulika and draws a bill, Radhika i…

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The Drawee is the person upon whom the bill is drawn. He is generally the debtor who has purchased goods on credit. The drawee becomes liable to pay when he accepts the bill. For example, Madulika is …

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The Acceptor is the person who accepts the bill and becomes legally bound to pay it. Usually, the drawee is the acceptor. By signing the bill, the drawee confirms their liability to pay on maturity.

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The Payee is the person to whom the payment is to be made. The drawer and payee are often the same, but the drawer may endorse the bill to a third party, making that party the payee. For example, if R…

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1. **Nature**: Bill of Exchange contains an order to pay; Promissory Note contains a promise to pay. 2. **Acceptance**: Bill requires acceptance by the drawee; Promissory Note does not. 3. **Drawer**:…

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Days of Grace refer to three extra days added to the due date of a bill to calculate its maturity date. For example, a 2-month bill drawn on 1st January matures on 4th March (1st March + 3 days of gra…