Understanding Credit Instruments: Bills of Exchange, Checks, Promissory Notes
Classified in Law & Jurisprudence
Written on in
English with a size of 2.99 KB
Credit Instruments
The instruments most commonly used in exchanges between companies are the bill of exchange, checks, and promissory notes.
Bill of Exchange
A bill of exchange is a commercial document whereby a person, the drawer, orders another, the drawee, to pay a certain amount of money on a particular date. The payment of the bill of exchange can be made to the drawer or a third party called the beneficiary, payee, or holder, to whom the drawer has sent or endorsed the bill of exchange.
- The drawer: Is the person who is a creditor of the debt and who issues the bill of exchange.
- The drawee: Is the debtor who must pay the bill of exchange. The drawee may accept or reject the payment order given by the drawer, and if they accept it, they are