Bill of Exchange

Index

 Bill of Exchange – what & why

 Definition - Example

 Parties involved

 Features of Bill of Exchange

What & Why

 Bill of Exchange – Negotiable instrument

 Need:Facilitate regular flow of cash either

immediately or after certain period of time.

 Documents for making payments, the ownership of

which can be transferred.
Definition :

 “Bill of exchange” is 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.

 Example : A post dated cheque.

Parties involved

 Three parties are involved:

 Drawer

 Drawee

 Payee
Specimen copy
Features of Bill of Exchange

A bill of exchange must be in writing.

 It must be dated

 It
must contain an order to pay a certain sum of
money.

 The order must be unconditional.

 The parties to a bill must be certain.

Thank you.