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Promissory Note & Bill of Exchange

A promissory note is a written promise to pay a specified sum on demand or at a fixed or determinable future time. It contains a primary and absolute obligation of the maker to pay the holder. In contrast, a bill of exchange creates a secondary conditional liability of the drawer, requiring acceptance by the drawee before it can be presented for payment. A bill of exchange typically involves three parties - the drawer, drawee, and payee - where two roles can be filled by the same person, while a promissory note only involves two parties, the maker and payee.

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hemantnalekar
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238 views

Promissory Note & Bill of Exchange

A promissory note is a written promise to pay a specified sum on demand or at a fixed or determinable future time. It contains a primary and absolute obligation of the maker to pay the holder. In contrast, a bill of exchange creates a secondary conditional liability of the drawer, requiring acceptance by the drawee before it can be presented for payment. A bill of exchange typically involves three parties - the drawer, drawee, and payee - where two roles can be filled by the same person, while a promissory note only involves two parties, the maker and payee.

Uploaded by

hemantnalekar
Copyright
© Attribution Non-Commercial (BY-NC)
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Download as DOC, PDF, TXT or read online on Scribd
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.Promissory note .It contains a promise to pay .1 The liability of the maker of a note is primary and absolute (S.

3 .2 .It is presented for payment without any previous acceptance by the maker .3 The maker of a promissory note stands in immediate relationship with the payee and is .4 .primarily liable to the payee or the holder It cannot be made payable to the maker himself. The maker and the payee cannot be the .5 .same person In the case of a promissory note there are only two parties, viz., the maker (debtor) and .6 the payee .A promissory note cannot be drawn in sets .7 .A promissory note can never be conditional .8 In case of dishonor no notice of dishonor is required to be given by the Holder .9 .Bill of exchange .It contains an order to pay .1 .The liability of the drawer of a bill is secondary and conditional .2 If a bill is payable sometime after sight, it is required to be accepted either by the drawee .3 .himself or by someone else on his behalf, before it can be presented for payment The maker or drawer of an accepted bill stands in immediate relationship with the acceptor .4 .and the payee .The drawer and payee or the drawee and the payee may be the same person .5 There are three parties, viz, drawer, drawee and payee, and any two of these 3 capacities .6 .can be filled by one and the same person .The bills can be drawn in sets .7 A bill of exchange cannot be drawn conditionally, but it can be accepted conditionally with .8 .the consent of the holder .A notice of dishonor must be given in case of dishonor of Bills of Exchange .9

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