Write a short-note on accommodation bill?
Answers
Answer:
Meaning of Accommodation Bill:
The Bill, which is drawn just to oblige a friend, who is in need of money, of course without any trading activities, with sole intention of raising funds required for ready cash is known as Accommodation Bill.
❁ᴘ᭄ʀ᭄ɪ᭄ᴜ᭄ ʜ᭄ᴇ᭄ʀ᭄ᴇ᭄❁
Answer:
An accommodation bill is a bill drawn by one person upon another, who accepts it for the mere convenience of the drawer, that is, not in consideration of value received, but as a means of raising money in behalf of the drawer.
The object of an accommodation bill should merely be that of affording assistance to a merchant in case of some unexpected emergency, on the understanding that the drawer, in whose favour the bill is accepted, is to provide the accommodation acceptor with funds to meet the bill when due.
The system has, however, degenerated into a fictitious expedient, whereby men of broken credit try to keep up for some time longer an unsustainable position, and has, therefore, often proved ruinous to credulous people lending their name to unscrupulous friends.
In the slang of trade, accommodation bills are often called kites or windmills, which gives an idea of the consideration they are held in by business men.