Bills Of

Exchange
 Introduction

 Negotiable
Instrument
A Negotiable
Instrument Means A
Promissory Note, Bill Of
Exchange Or Cheque Payable
Either To Order Or To
Bearer
 Types Of Negotiable

Instrument
Recognized Recognized By

By Statute Usage Or
Custom

1. Bills Of 1. Hundis
Exchange 2. Share Warrants
2. Promissory 3. Dividend Warrants
Notes 4. Bearer
3. Cheques Debentures
 Bills Of
Exchange
According to section 5 of Negotiable
Instrument Act,

A Bill Of Exchange is an
instrument in writing containing an
unconditional order, signed by the
maker , directing a certain person
to pay a sum of money only to or
to the order of a certain person or
to the bearer of the instrument
 Specimen Of A Bill Of
Exchange
JAMMU

27th Nov. 2006

Three months after due date, pay XYZ or order, the

Sum of Rs 1000(one thousand only) for value received. Stamp

To,
M/S ABC
Gandhi Nagar
Jammu
 Parts Of A Bill Of
Date Exchange

Term
Amount

Stamp

Parties
 Special
1.

2.

3.
features
A Bill Of Exchange is an instrument in writing
It must be signed by the maker
It contains an unconditional order
4. The order must be to pay money and money
only
5. The sum payable must be specific
6. The amount must be paid within a stipulated
time
7. The name of the drawee must be clearly
mentioned
8. It must be dated and stamped
 Parties to a Bill Of
Exchange
Drawer
The person who draws or
writes the Bill Of Exchange is
called the Drawer. The Drawer
must be the seller or creditor
to whom the money is owing
 Drawee
The Drawee is the person on
whom the bill is drawn. He is
the purchaser or debtor who
is ordered by the Drawer to
pay the amount
 Payee
The person who has the
right to receive the amount
of the bill is called the
Payee, the Payee may be a
third person or the Drawer
himself
 Advantages of Bill of
1.
Exchange
A Bill of Exchange is used in
settlement of debts
2. It fixes the date of payment
3. It is a written and signed
acknowledgement of debt
4. A debtor enjoys full period of credit
5. A drawer can convert the bill into
cash by getting it discounted with
the bank
 Kinds of Bills Of
Exchange
Inland
Foreign
Bill Bill
 Kinds of Bills Of
Exchange
Trade Bills Accommoda

tion Bills
 Kinds of Bills Of
Exchange
Demand
Time Bill
Bill