Promissory note differs from a bill of exchange in the following respects Promissory Note 4. There ate only two parties, the maker (debtor) and the payee (creditor) 2. Anote contains an unconditional promise by the maker to pay the payee 3.No prior acceptance is needed 4. Thelinbilty ofthe maker on drawer is primary and absolute 5. No notice of dhonour need be given, 6. The maker ofthe note stands in relation with the payee. Bill of Exchange There are three partis ~ the drawer, the drawee and the payee, akhough any two of these capacities may be filled ‘by one and the same person Iecontaine an unconditional order tothe drawee to pay according tothe drawers directions. AAbill payable ‘after sight” must be accepted by the drawee (or his agent before itis presented for payment. ‘The lability ofthe drawer ie secondary and coneitional upon non-payment by the drawee Notice of dshonour must be given by the holder tothe ‘drawer and the intermediate indorsers to hold them liable thereon, ‘The maker or drawer does immediate not standin intermediate relation with the payee but withthe acceptor or drawee.Difference between Bill of Exchange and Cheque Cheque Bill of Exchange 1 It must be drawn only on a banker It can be drawn on any person including a banker 2. The amount is always payable on demand. The amount may be payable on demand or after a specified time, 3. The holder of a cheque is not entitled Aholder of a bill is entitled to three days of grace 4. Acceptance is not needed Abill payable after sight must be accepted 5. A cheque can be crossed Crossing of a bill of exchange is not possible 6. Notice of dishonour is not necessary. Notice of dishonour is necessary to hold the parties liable thereon A party which does not receive a notice of dishonour The patties thereon remain liable, even if no notice can generally escape his liability thereon of dishonour is given. 7.A cheque is not to be noted or protested Abill is noted or protested to establish dishonour in case of dishonour 8. The protection given to the paying banker No such protection is available in the case of bills in respect of crossed cheques is peculiar to this investment.