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Tuesday, 23 August 2011

Difference between cheque and bill of exchange

We can distinguish between cheque and bill of exchange by the following facts :


CHEQUE :-

1. It is always drawn on a specified banker.

2. It is immediately payable on demand without any grace.

3. It does not require acceptance.

4. Its drawer is not discharged by the holder's failure to present it in due time unless the bank fails.

5. It may be crossed.

6. Notice of dishonour is not necessary when a cheque is not met.

7. No nothing and protesting is required.

8. The banker is protested if he pays a cheque under forged endorsement.



BILL OF EXCHANGE :-

1. It may be drawn on any body including a bank.

2. It may be payable on demand or at a fixed date.

3. It requires acceptance unless it is payable on demand.

4. It is entitled to three days of grace.

5. Its drawer and endorsers are discharged from liability. If the holder fails to present it to the acceptor at a due date.

6. It can never be crossed.

7. A notice of dishonour must be given.

8. Nothing and sometimes protesting is required.

9. No such protection is afforded to a drawee in case of bill.

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