Bill of exchange
An unconditional order in writing, signed by a creditor (drawer) such as a buyer, and addressed to another person (drawee), typically a bank, ordering the drawee to pay a stated sum of money to yet another person (payee), often a seller, on demand or at a fixed or determinable future time. The most common version of bills of exchange are:
- A draft, wherein the drawer instructs the drawee to pay a certain amount to a named person, usually in payment for the transfer of goods or services. Sight drafts are payable when presented, and time drafts are payable at future fixe date or determinable (30, 60, 90 days, etc.).
- A promissory note, wherein the issuer promises to pay a certain amount.