Chapter 4: Bills of Exchange

What is a bill of exchange? How is it used? Who are the parties involved? In this course we find the answers to these, and more.


With the increase in the numbers and size of business, the number of credit transactions and their importance is also increasing day-by-day. Many times, if the payment of the amount of goods given on credit is not received on time, businessmen have to face financial problems and it also affects their other transactions. Hence, each businessman wishes to receive the amount of a credit transaction in time. To maintain the financial liquidity, normally businessmen use a document through which, the person from whom an amount is receivable, accepts his debt in writing and states the time of payment of the amount; or accepts to pay at the time stated in the document. If the debtor fails to pay the amount, this document can be used as a written evidence of the dues.

In this way, the documents used are of two types: (1) Bills of Exchange, and (2) Promissory Notes.

In this course:
+ Introduction
+ Meaning, Definition and Characteristics of Bills of Exchange
+ Different Parties of Bills of Exchange
+ Specimen of Bills of Exchange
+ Meaning, Definition and Characteristics of Bills of Promissory Notes
+ Different Parties of Promissory Notes
+ Specimen of Promissory Note
+ Difference between Bill of Exchange and Promissory Note
+ Bills Receivable and Bills Payable
+ Terms of Bill, due date and days of grace
+ Bills at sight and bill after dated
+ Disposal or uses of a bill
+ Dishonour of a bill
+Insolvency of the acceptor of bill
+ Renewal of bill
+ Accomodation bill

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