An instrument in writing containing an unconditional order. Signed by the maker, directing a certain person. To pay a certain sum of money only to or to the order of a certain person or the the bearer of the instrument. It means that if an order is made in writing by one person on another directing him to pay a certain sum of money unconditionally to a certain person or according to his instruction or to the bearer, and if that order is accepted by the person on whom the order was make, the documents is a bill of exchange.
Essentials of a bill of exchange
1. It should be in writing.
2. It should contain an order by the seller to the purchaser to make the payment in future does not amount to a bill of exchange.
3. The order contained in the biol should be unconditional. A bill of exchange with a conditional order can not be made payable.
4. The maker of the bill or the seller is known as drawer and the bill must be signed by him otherwisee. It will be invalided.
5. The purchaser upon whom the bill is drawn is known as drawee and he must be a certain person.
6. Amount ordered to be paid by the drawer in a bill must be certain and it should be in money alone and not in goods.
7. The person to whom payment of bill is to be made is known as payee and he must be a certain person or the bearer of the bill
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