What is Bill of exchange?

Features, Examples According to the Negotiable Instruments Act 1881, a bill of exchange is defined as “an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of a certain person or to the bearer of the instrument”.

Who makes a bill of exchange?

A bill of exchange has three parties: The drawer is the maker of a bill of exchange. The bill is signed by Drawer. A creditor who is entitled to receive payment from the debtor can draw a bill of exchange. Drawee is the person upon whom the bill of exchange is drawn. Drawee is the debtor who has to pay the money to the drawer.

Who is involved in a bill of exchange?

A bill of exchange involves three key parties: the drawer, the payee, and the drawee. Bills of exchange are used in international trade to facilitate secure payment for goods and services. They come in various types, including bank drafts, trade drafts, sight drafts, and time drafts.