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features of bill of exchange
A Bill ‘Payable at Sight’ becomes due immediately when it is presented for payment. Acceptance of the bill denotes that the drawee has agreed to pay the amount mentioned in the bill on the maturity of the bill or on demand, as the case may be. Please comment below if you have any feedback or suggestions. If the drawer has a doubt that the original drawee will not accept or dishonour the bill, he may write the name of another person for accepting the bill in case the original drawee does not accept it (You may think him to be a backup for the drawee). Special Characteristics considered: Taking each of the Special Characteristics seriatim: as to. From the above definition one can infer that the features of bills of exchange are – Save my name, email, and website in this browser for the next time I comment. Account Disable 11. On 5.1.2011 Pawan got the acceptance of Harish. However, in the case of qualified acceptance, name of the bank or specified place for payment is mentioned. Bill of exchange has been defined as a negotiable instrument under the Negotiable Instruments Act, 1881.
Consideration means in lieu of and in the context of bills of exchange, it means that the bill has been issued in exchange of some consideration i.e., benefit has already been received. He is the person who is entitled to receive the money (i.e the Creditor). 9. After acceptance, the bill of exchange becomes a legal document. This aspect is very important to determine the maturity date of the bill. • The order to make payment is unconditional. Please note that here we are ignoring the actual number of days in the month and counting 1st Jan to 1st Feb as one month and so on. 13 of the Stamp Act lays down the proper stamp for bills of exchange (see seq.). out of amount standing to one’s credit or “out of moneys coming from X”(d) , it has been held that the document is not as valid bill, because there may been no or notice sufficient fund or notice money may been recovered at all. However, for settlement of a credit transactions, bills of exchang…
If you are conversant with the Hindi Language then you can watch this video for detailed explanation of the topics discussed below or you can continue reading below. Plagiarism Prevention 5. Payee is the person to whom the money is payable. Report a Violation 10. In such scenarios, the role of the bill of exchange became important. In absence of a proper stamp, the bill may be in admissible in evidence (sec.35, Stamp act). TOS4. Similarly, where moneys are directed to been paid out of as certain fund, e.g. Before uploading and sharing your knowledge on this site, please read the following pages: 1. You have entered an incorrect email address! In this article we will have a formal introduction to Bills of Exchange. The money payable not vague and must be certain. Sometimes, bill can be issued for mutually accommodating the parties so that financial help can be given to each other. There may be three parties to the bills of exchange, drawer, drawee and payee.
Features of Bill of Exchange 1. Here you can publish your research papers, essays, letters, stories, poetries, biographies and allied information with a single vision to liberate knowledge.
As it is a legal document, it makes it easy for stranger people to trust each other to get involved in business transactions. • The payment to be made must be certain. However, in the following cases drawer and payee are two different persons: (i) When the bill is discounted by the drawer, the person who discounted the bill becomes the payee. Briefly speaking, before a document can be called a bill of exchange, the drawer must be certain, the order must be certain, the drawee must be certain, the payee must be certain and the sum payable must also be certain. —Section 5 of the Negotiable Instruments Act, 1881. Bill of exchange can be defined as an instrument in writing containing unconditional order signed by the maker directing a certain person to pay predetermined sum of money only to or to the order of a certain person or to the bearer of the instrument. The maker of the bill of exchange must sign it. Bills of exchange are not a request to pay and an order to pay. ‘Drawer’, ‘Drawee’ and ‘Payee’ to a bill of exchange. Date: the date is mentioned in order to compute maturity of bill. You must have heard of a Cheque which is drawn on a bank by a person who wants to make payment using funds in his bank account.
3. Unsigned document will not be legally valid. In the example taken above, the date on which the bill was drawn is 6th October, 2017 and the tenure is 2 months.
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