Meaning
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A bill of exchange is a written acknowledgement of debt, given by the debtor to his creditor, for the sum due and the time of payment as well as the date and place of payment being set down.
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A bill of exchange has been 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 certain person or to the bearer of the instrument.”
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When such an order is accepted by writing on the face of the order itself, it becomes a valid bill of exchange.
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For example, suppose Ram order Shyam to pay Rs. 50,000 three months after date and Shyam accepts this order by putting his signature and name on it, then it will be a bill of exchange
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Last modified: Saturday, 2 June 2012, 7:38 AM