Understanding Checks, Promissory Notes, and Bills of Lading
Classified in Law & Jurisprudence
Written on in
with a size of 2.76 KB
Understanding Checks
Definition
A check is a bill of exchange drawn on behalf of a banker, which is payable on demand by the banker.
Three-Party Structure
- Drawer: The person who orders the draft.
- Drawee: The banker against whom the draft is drawn and who is ordered to pay.
- Payee: The person to whom the draft is payable.
The Process
The drawer gives the payee a written order that directs the drawee to pay money to the payee or to whomever the payee designates through an appropriate endorsement. The payee must collect the money from the drawee by physically presenting the draft and demanding payment. Checks are distinct from other instruments because they are drawn on a bank and are payable on demand.
Promissory Notes
Definition
A promissory note is an... Continue reading "Understanding Checks, Promissory Notes, and Bills of Lading" »