Bill of Exchange/Draft is the most typical bill of exchange, which can best reflect the basic functions of bills of exchange and is the most widely used in practice.
1. Concept of Bill of Exchange
my country’s Bills of Exchange Law stipulates that a bill of exchange is a bill issued by the drawer, entrusting the payee to unconditionally pay a certain amount to the payee or holder upon sight of the bill or on the date specified in the bill.
2. Parties to a bill of exchange
There are three basic parties to a bill of exchange, namely the drawer, the payee and the payee.
(1) Drawer. The drawer is the person who opens and issues a bill of exchange and delivers it to others.
(2) Payer or drawee. The payer/drawee is the person who accepts the payment order.
(3) Payee. The payee is the person who receives the bill, that is, the beneficiary of the bill of exchange. After a bill of exchange enters the circulation field, the following circulation parties (Remote Party) will appear.
(4) Endorser. If the payee does not intend to withdraw the money with the bill, but signs and seals on the back of the bill and delivers it to the transferee to transfer the bill rights, the payee becomes the first endorser. If the bill of exchange is further transferred in the future, the second and third endorsers will appear.
(5) Endorser. The endorsee is the person who accepts the endorsement. When he accepts the endorsed bill of exchange and then transfers the bill of exchange, he is called another endorser. If the endorsee does not transfer the bill of exchange, he is called the holder.
(6) Holder. The holder is the person who owns the bill of exchange, including the payee and the endorsee.
3. The main content of the bill of exchange
(1) Indicate “bill of exchange”. For example: Exchange for USD1000.00 or Draft for USD1000.00. The purpose of indicating the word “bill of exchange” is to distinguish it from other bills such as promissory notes and checks.
(2) Unconditional Order to Pay. That is, the order to pay a bill of exchange does not impose any restrictions or additional conditions. If it does, the bill of exchange will be invalid. This is conducive to ensuring the reliability of bill payment and protecting the bill rights of the bill holder.
(3) Place and Date of Issue. The place of issue is of great significance to international bills of exchange because international practice follows the legal principle of behavior. If the act of issuing a bill occurs in a certain place, it is based on the law of the country where it is located, and on this basis, it is determined whether the necessary items of the bill of exchange are complete and whether the bill of exchange is established and valid.
The date on which the payee performs his payment obligation.
(4) Time of Payment/Tenor/Term/Maturity. Time and term of payment are
(5) Certain in Money. A bill of exchange is a monetary instrument for the purpose of paying a certain amount of money, so the definite amount is considered an absolutely necessary item in the bill of exchange laws of all countries.
(6) Name of the payee. The payee refers to the initial bill of exchange amount recorded by the drawee on the bill of exchange.
(7) Name of the payee and place of payment (Drawee).
(8) Signature of the drawer.