Distinction between A Bill of Exchange and a Promissory Note



No
                  
   Promissory Note
       
    A Bill of Exchange


1)

In Promissory Note, there are two Parties - the maker and the Payee.


In a bill of exchange, there are three parties – the drawer, the drawee, and the payee


2)

A note contains an unconditional promise to pay. 


A bill contains an unconditional order to pay.


3)

The makers of a note is the debtor and he himself undertakes to pay 

The drawer of a bill is the creditor who directs the drawee (his debtor) to pay


4)

The maker of a note corresponds in general to the acceptor of a bill. But the maker of note cannot undertake to pay conditionally.


In case of a Bill of exchange, the acceptor may accept the bill conditionally because he is not the originator of the bill.    

5)

The liability of a maker of a note is primary and absolute.

The liability of drawer of bill is secondary and Conditional


6)

A note cannot be made payable to the maker himself

In a bill, the drawer and payee may be one and the same person


7)

A note requires no acceptance as it is signed by the person who is liable to pay.

A bill payable after sight or after certain period must be accepted by the drawee before it is presented for payment.


8)

A note cannot be drawn payable to bearer.


A bill can be so drawn

9)

The maker of a note stands in immediate relation with the payee.

The drawer of a bill stands in immediate relation with the acceptor and not the payee.



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