Q.State any two points of difference between a Bill of Exchange and a Cheque.

A cheque is legally a special kind of bill of exchange, so the differences are really about the extra restrictions a cheque carries.

A cheque is defined (Section 6) as a bill of exchange drawn on a specified banker and payable only on demand — so every cheque is a bill of exchange, but with additional restrictions. Points of difference (any two required, full list given for completeness):

1. Drawee — a cheque must be drawn on a BANKER; a bill of exchange can be drawn on any person or firm.
2. Time of payment — a cheque is always payable ON DEMAND; a bill of exchange may be payable on demand or after a specified/determinable period.
3. Acceptance — a bill of exchange must be ACCEPTED by the drawee before the drawee is liable to pay; a cheque never requires acceptance.
4. Stamping — a bill of exchange must be duly stamped; a cheque requires no stamp duty.
5. Days of grace — a time bill of exchange is allowed three days of grace; not applicable to a cheque.
6. Crossing — a cheque can be crossed (restricting payment to a bank account); a bill of exchange cannot be crossed. …

Students sometimes state that 'a cheque cannot be transferred' — this is wrong; an order cheque is transferable by endorsement and delivery exactly like a bill of exchange. The r …