How many parties are there in a bill of exchange?

Bill of exchange is usually defined as a return agreement or a notice that is done for international trade.

It is done so that the party which agreed to pay a definite amount pays the money to the other party at a decided rate. This type of Bill is used in international trade and is used to help importers and exporters to fulfil all the transactions and the money that is set up by the parties. The Bill of exchange is composed of three different parties that are drawee, drawer and payee. It is defined to be a financial instrument and is consist of the order in a written form.

This type of Bill bounces the party to pay a fixed amount of money to the other party which was decided at the time of agreement. It is also known as the draft and it can be applied to any of the instruments or any of the products that are included in the foreign exchange.

Define bill of exchange

A Bill of exchange is defined as any instrument in the return form that contains an unconditional order to pay a certain amount of money as was decided at the time of the agreement and it is signed by the maker. It is made to direct a person to pay a specific amount of money in order to

good.

Features of Bill of Exchange

• Bill of exchange should be present in written form.

• Bill of exchange should not be considered a request but an order to make payment at the necessary time.

• Bill of exchange should be unconditional as made by the maker. The amount that is written in the Bill of exchange should be a definite amount and not be any amount.

• Bill of exchange should contain a fixed date on which the amount should be paid.

Bill of Exchange types :

There are many types of Bill of exchange and some of them are written as :

Documentary bill of exchange :

This is the type of Bill of exchange that is supported by a specific type of document that confirms the sale and transaction in a very ordered way.

This type of bill of exchange is made between the seller and the buyer.

Usance bill of exchange :

This is the Bill of exchange that has to be paid over a bounded period of time. The date that is written on the bill of exchange should be considered the last day to pay the amount.

Inland bill :

This type of Bill of exchange should be paid only in one country and not in all of the other foreign countries.

This is not considered a bill to be satisfied in every foreign country.

Clean bill :

This type of Bill of exchange does not possess any specific proof of the document so everybody wants to be a part of the clean bill.

Foreign bill :

As the name suggests, the bill that can be paid outside India across foreign countries is dumped as the foreign bill. This bill is generally used for the import and export of the materials.

Trade bill :

This kind of Bill is related only to one trade and not to all the trades.

Accommodation bill :

The bill that is made and accepted without any previously decided condition is termed to be the accommodation bill.

Supply bill :

This type of that is eliminated by the contractor from the government department is termed to be as the supply bill.

Bill of Exchange parties :

There are generally three main parties that are the part of Bill of exchange namely :

1. Drawer :

The drawer is defined to be as the person who is a Bill maker.

The bill is made and signed by the drawer.

Drawer made the required amount to be paid as a result of the Bill of Exchange.

2. Drawee :

Drawee is defined as the person against whom the bill of exchange is made.

Drawee is defined as the person who has to pay the money to the dryer as accepted by the bill of Exchange. Drawee can be termed as the acceptor.

3. Payee :

This party is defined as the person to whom the payment has to be done.

This party can be a drawer or a third party to whom the payment should be made.