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CBSE Class 11-commerce Answered

Define the following: Bill of exchange Promissory note
Asked by Topperlearning User | 11 Aug, 2016, 09:56: AM
answered-by-expert Expert Answer
  1. Bill of exchange: According to Section 5 of the Negotiable Instruments Act, 1881, “A bill of exchange is an instrument in writing, containing an unconditional order, signed by the maker directing a certain person to pay a certain amount of money only to or to the order of a certain person or to the bearer of the instrument”. A bill of exchange has three parties namely drawer, drawee and the payee. The bill of exchange must be accepted by the drawee to make it a valuable document.

 

  1. Promissory note: According to Section 4 of the Negotiable Instruments Act, 1881, “A promissory note is an instrument in writing containing an unconditional undertaking signed by the maker to pay a certain sum of money only to or to the order of a certain person or to the bearer of the instrument. A promissory note has two parties namely maker/promissor and the payee.
Answered by | 11 Aug, 2016, 11:56: AM
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