Q.10 What is the difference between the bill of exchange and promissory note?
|BILL OF EXCHANGE||PROMISSORY NOTE|
It is an order, written by the drawer to pay to drawee a specified sum of money at a certain date.
|It is a promise, written by the drawer to pay to the the drawee a specified sum of money at a certain date.
It is a written order of payment to the acceptor.
|It is a written promise of payment by debtor or its debtee.|
It (except a sight bill) does need an acceptance (for drawing) from its drawee.
|It needs no acceptance (for drawing) from drawee.
It (if is inland) needs no further copies but three copies are made if it is foreign.
|It needs no further copies.|
Sometimes, instead of drawee another person accepts it; therefore it has four parties viz., drawer, drawee, payee and acceptor.
|It has two parties – viz., drawer and payee.
Its drawer can be ordinary debtee or seller.
|Its drawer can be ordinary debtor or buyer.|
Its drawee is the debtor or buyer.
|Its drawee is the debtee or seller.|
Its drawer can also be the payee.
|Its drawer can never be the payee.|
Its holder can be the creditor, or drawer or endorsee.
|Its holder can be the debtor, or drawee or endorsee.|
Its drawee is responsible for the payment.
|Its drawer is responsible for the payment.
|11. Days of grace:
It (except sight bill) has three days of grace.
|It has no days of grace.|
|12. Noting or Protesting
It if dishonoured does need noting. Further in case of a foreign bill, protesting follow noting.
|It is free of the need of noting or protesting against its dishonour.
It is more in use then as note.
|It is less in use than as bill.
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