Bills of Exchange

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.

A holder who acquires a bill for value before maturity without notice of defect.

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).

Acceptance by a third party to save the honour of the drawer or endorser.

A Bill of Exchange is an order to pay made by the creditor on the debtor, involving three parties, whereas a Promissory Note is a promise to pay made by the debtor to the creditor, involving only two parties.

A bill payable immediately on presentation or demand to the drawee.

Acceptance is the act by which the Drawee signifies his assent to the order of the Drawer by writing the word 'Accepted' and signing on the bill; once accepted, the Drawee becomes the Acceptor and is primarily liable to pay.

Payment made by a third party to protect the reputation of the drawer or endorser.