Distinction between A Bill of Exchange and a Promissory Note
No
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Promissory Note
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A Bill of Exchange
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1)
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In Promissory Note, there are two Parties - the maker and the Payee.
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In a bill of exchange, there are three parties – the drawer, the drawee, and the payee
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2)
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A note contains an unconditional promise to pay.
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A bill contains an unconditional order to pay.
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3)
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The makers of a note is the debtor and he himself undertakes to pay
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The drawer of a bill is the creditor who directs the drawee (his debtor) to pay
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4)
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The maker of a note corresponds in general to the acceptor of a bill. But the maker of note cannot undertake to pay conditionally.
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In case of a Bill of exchange, the acceptor may accept the bill conditionally because he is not the originator of the bill.
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5)
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The liability of a maker of a note is primary and absolute.
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The liability of drawer of bill is secondary and Conditional
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6)
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A note cannot be made payable to the maker himself
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In a bill, the drawer and payee may be one and the same person
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7)
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A note requires no acceptance as it is signed by the person who is liable to pay.
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A bill payable after sight or after certain period must be accepted by the drawee before it is presented for payment.
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8)
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A note cannot be drawn payable to bearer.
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A bill can be so drawn
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9)
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The maker of a note stands in immediate relation with the payee.
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The drawer of a bill stands in immediate relation with the acceptor and not the payee.
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