Q.State the 3 parties in a bill of exchange.

A bill of exchange is a written, signed, unconditional order by which one person (the drawer) directs another (the drawee) to pay a certain sum of money to a third person (the payee) or to bearer, on demand or at a fixed/determinable future date, as defined under Section 5 of the Negotiable Instruments Act, 1881.

Three roles always exist: the drawer (who makes the order — usually the seller), the drawee (who must pay — usually the buyer, and who becomes the 'acceptor' once signing the bill), and the payee (who receives payment — often the drawer again). Once the bill starts changing hands, the current owner is called the holder, and a transfer by signature on the back of the bill is an endorsement, making the transferor the endorser and the new owner the endorsee. …