What is Bill of Exchange?
Definition "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 sum certain in money to or to the order of a specified person, or to the bearer". Meaning A bill of exchange is a non- interest bearing written order which is used primarily in foreign trade which binds one party to pay a fixed amount of money to another party at a decided future date. A bill of exchange is a signed by the creditor and accepted by a debtor. Parties involved in a bill of exchange 1. Drawer: The person who makes a bill of exchange is called the drawer. He is either a creditor or a seller and orders the borrower to pay the borrowed money. 2. Drawee: A drawee is the one to whom the bill of exchange is made. He is either a buyer or a debtor. 3. Payee: One who has to receive the amount of the bill of exchange is called the payee. In a bill of exc