Long Answer Questions · Q4
Q.Distinguish between bill of exchange and promissory note.
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Start your 14-day free trial to unlock the full solution →They differ in who draws them, order vs promise, number of parties, acceptance, the payee, and notice of dishonour.
| S.No. | Basis | Bill of Exchange | Promissory Note |
|---|---|---|---|
| 1 | Drawer | Drawn by the creditor. | Drawn by the debtor. |
| 2 | Nature | Contains an unconditional order to pay. | Contains an unconditional promise to pay. |
| 3 | Parties | Three — drawer, drawee, payee. | Two — maker (drawer) and payee. |
| 4 | Acceptance | Requires acceptance by the drawee. | Requires no acceptance. |
| 5 | Payee | Drawer and payee can be the same. | Drawer cannot be the payee. |
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