CLASSIFICATION OF BILL OF EXCHANGE

Bill of Exchange (BOE)

As per Section 5 a bill of exchange” is “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 to the bearer of the instrument.”

Classification of bill of exchange

On the basis of period bills are of two types: 1.Demand bills and 2.Term bills

• Demand Bills of Exchange: There is no fixed date for the payment of such bill. They become payable at any time, when they are presented before payee by the holder.
• Term Bills of Exchange: These bills are payable after specified period of time. The period after which these bills become due for payment is called tenor.On the basis of purpose of writing the bills, the bills can be classified as: Trade Bills. Accommodation Bills. Trade Bills: These bills are drawn and accepted against the sale and purchase of goods on credit. These are drawn by the seller (creditor) and accepted by the buyer (debtor).
  Accommodation Bills: Such bills do not involve any sale and purchase of goods: rather they are drawn without any consideration. The purpose of such bills is to help one party or both the parties financially. The bills can be further classified into two classes given as under:
  Inland Bill : These bills are drawn in a country upon person living in the same country or made payable in the same country. Both drawer and the drawee reside in the same country. Foreign Bills : These bills are drawn in one country and accepted and payable in another country, eg. a bill drawn in England and accepted and payable in India.

Bill Of Exchange👇 https://freebird.data.blog/2022/07/18/bill-of-exchange-boe/