Monday, 22 August 2011

Distinguish or Difference between bill of exchange and promissory note

We can distinguish or difference between bill of exchange and promissory note by the points :


1. Number Of Parties :-

Bill of exchange : There are three parties in the bill of exchange.

Promissory note : There are two parties in the promissory note.



2. Number Written By :-

Bill of exchange : It is written by the creditor.

Promissory note : It is written by the debtor.



3. Order And Promise :-

Bill of exchange : In a bill of exchange it is an order.

Promissory note : In a pro-note it is a promise to make the payment.



4. Acceptance :-

Bill of exchange : It must be accepted by the drawee before.

Promissory note : It requires no acceptance.



5. Dishonour Notice :-

Bill of exchange : In this case notice of dishonour must be given by the holder to the concerned parties.

Promissory note : In case of promissory note there is no need to serve the notice to the maker.



6. Protest :-

Bill of exchange : A foreign bill must be protested in case of dishonour.

Promissory note : Protect is not needed in case of pro-note.



7. In Sets :-

Bill of exchange : A foreign bill can be drawn in sets.

Promissory note : A pro-note cannot drawn in sets.



8. Liability :-

Bill of exchange : The drawer is liable only when the acceptor does not honour the bill.

Promissory note : The liability of pro-note maker is primary.



9. Payable To Bearers :-

Bill of exchange : A bill can be drawn if it is not drawn payable to bearer on demand.

Promissory note : A pro-note can not be drawn payable to the bearer.



10. Drawer and Payee :-

Bill of exchange : In this case drawer or payee may be the same person.

Promissory note : In case of pro-note the drawer can not become the payee.



11. Drawer's Position :-

Bill of exchange : In this case the drawer of accepted bill stands in an immediate relation with the acceptor and not the payee.

Promissory note : The drawer of the pro-note stands immediate relations with the payee.



12. Conditional :-

Bill of exchange : The acceptance of the bill may be conditional with the holders consent.

Promissory note : A pro-note cannot be made conditional.



13. Presentment :-

Bill of exchange : In this case provision relating to presentment for acceptance is applicable.

Promissory note : Such provision is not applicable in case of promissory note.



5 comments:

Gull nawaz 15 May 2013 at 22:46  

nice work, my is been removed to very extent, 9stars!!

Eliud Njuguna Kenya 23 August 2017 at 05:14  

helped me so much in my studies and more so to my upcoming exams on 28/08/2017

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