Livestock Economics, Marketing and Business Management

PARTIES TO A BILL OF EXCHANGE

• There are three parties to a bill of exchange:
  • Drawer, i.e., the person who draws the bill. He is the creditor to whom the amount is owing.
  • Drawee, i.e., the person to whom the bill is addressed or on whom it is drawn. He is the debtor who owes the amount. After he accepts the bill, he is called the ‘Acceptor’ .
  • Payee, i.e., the person to whom the sum of money is payable. Sometimes, the drawer requires the amount to be paid to himself, in which case, the drawer and the payee are the same person.

Essential characteristics of a bill of exchange

• The essential characteristics of a bill of exchange are as follows:
  • A bill of exchange is an unconditional order.
  • It must be in writing.
  • It must be dated.
  • It is addressed by one person to another.
  • It must contain an order to pay a fixed amount of money.
  • The amount must be payable to a specified person or to his order or to the bearer of the bill.
  • The draft must be accepted by the party on whom the order is drawn and addressed.