Q.Why is a promissory note said to have only two parties, while a bill of exchange has three? Name them in each case.

The party-count difference follows directly from whether the instrument is a promise (self-contained) or an order (needs someone to direct).

A promissory note is, by its very nature, a self-contained PROMISE: the person who owes the money (the maker) personally undertakes, in their own signed instrument, to pay the person to whom the money is owed (the payee). There is no third party involved at all — the maker's promise is directly to the payee, so only two parties (and two roles) exist.

A bill of exchange, by contrast, is an ORDER, not a self-contained promise: the drawer (typically the creditor) does not promise to pay personally — instead, the drawer directs a THIRD person, the drawee (typically the drawer's own debtor), to pay the amount to the payee (who may be the drawer themselves, or yet another person). Because the drawer is instructing someone ELSE to make the payment, a third role — the drawee — is structurally necessary, which is why a bill of exchange always has three par …

Students sometimes list 'endorsee' as a fourth original party to a bill of exchange — an endorsee only enters the picture LATER, through negotiation; the bill's own original …