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Bills of Exchange
What is a Bill of Exchange as defined under the Negotiable Instruments Act, 1881?
A Bill of Exchange is an unconditional order in writing, addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand or at a fixed or determinable future time a certain sum of money to a specified person or to the bearer.
What is the meaning of 'holder in due course' in relation to a Bill of Exchange?
A holder who acquires a bill for value before maturity without notice of defect.
Who are the three parties involved in a Bill of Exchange?
The three parties are the Drawer (who draws/creates the bill), the Drawee (on whom the bill is drawn and who must pay), and the Payee (who receives the payment).
What is meant by 'acceptance for honour' of a Bill of Exchange?
Acceptance by a third party to save the honour of the drawer or endorser.
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