A bill of exchange is an instrument in writing. It is a convenient means of credit. It is drawn and signed by the maker i.e. drawer of the bill. It is drawn on a specific person i.e. drawee, to pay the specified amount. It contains an unconditional order to a person. To make an instrument of value the drawee must accept it. They provide a framework for the relationship. It enables a credit transaction between the creditor and the debtor on an agreed basis. A buyer can buy goods on credit by using a bill of exchange and then pay it after the credit period. A cheque is a type of bill of exchange, used for the purpose of making payment to any person. Most people are unfamiliar with a bill of exchange since it is not commonly used in domestic business transactions and is never used for personal loans. A bill of exchange is similar to a promissory note, but has some key differences.

Saket Kumar

116 resources

1

5

3

Like