Question

define bill of exchange?​

Answer 1

Answer:

a written order to a person requiring them to make a specified payment to the signatory or to a named payee; a promissory note.

Explanation:

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Answer 2

ANSWER :

In case of credit sale, when the seller i.e., the creditor makes the credit instrument which is a document containing an undertaking to pay with details if amount payable, to whom payable, date of payment etc. and the purchaser i.e., the debtor undertakes to honour it by giving his acceptance on the same; it is called "Bills 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 sum of money only to, or to the order of a certain person, or to the bearer of the instrument".

❖ Features of a Bill of Exchange :-

• [1] It is a written document.

• [2] It is an unconditional order to pay.

• [3] It is signed by the maker (or drawer) of the bill.

• [4] It must be properly stamped.

• [5] It contains an order to pay a definite akount which is generally stated both in figures and words on the face of the instrument.

• [6] Amount is payable either on the expiry of a fixed period from the date of the bill or on demand.

• [7] Amount is payable either to a specified person or to his order, or to the bearer.