Bill of Exchange, can be understood as a written negotiable
instrument, that carries an unconditional order to pay a specified sum of money
to a designated person or the holder of the instrument, as directed in the
instrument by the maker. The bill of exchange is either payable on demand, or
after a specified term.
Parties to Bill of
Exchange
1. Drawer: The person who makes the bill,
or who gives the order to pay a certain sum of money, is the drawer of the
instrument.
2. Drawee: The person who accepts the bill
of exchange, or who is directed to pay a certain sum, is called drawee.
3. Payee: The person receiving payment is
called the payee, who can be a designated person or the drawer himself.
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