PARTIES TO A BILL OF EXCHANGE

Bill of Exchange (BOE) :-
A bill of exchange is a written acknowledgement of the debt, written by the creditor and accepted by the debtor.) It is called a draft before its acceptance. Therefore, one of the underlying features of a bill of exchange is that it has to be accepted either by the person upon whom it is drawn or by someone else on his/her behalf.

Parties to a Bills of Exchange

Usually there are three parties to a bill of exchange Drawer,Drawee and Payee.

• Drawer : Drawer is the maker of the bill of exchange. A seller/creditor who is entitled to receive money from the debtor can draw a bill of exchange upon the buyer/ debtor. After writing the bill of exchange the drawer is required to sign the bill as maker of the bill.
• Drawee : Drawee is the person upon whom the bill of exchange is drawn.
• Payee : Payee is the person to whom the payment is made. The drawer of the bill himself will be the payee if he keeps the bill with him till the date of its payment. The payee may change in the following situations. 1.In case the drawer has got the bill discounted, the person who has discounted the bill will become the payee; 2.In case the bill is transferred in favour of a creditor of the drawer then the creditor will become the payee. Normally. the drawer and the payee is the same person. Similarly, the drawee and the acceptor is normally the same person.
• Acceptor : The person who accepts the bill is known as the acceptor. Normally the drawee is the acceptor. But a stranger can also accept a bill on behalf of the drawee. Drawee of a bill of exchange accepts it by signing on face of the bill. He or she thereby accepts the liability for payment of the bill on or before the bill’s maturity date.
• Endorser : When the holder transfers or endorses the instrument to any other person the holder becomes the Endorser.
• The Endorsee : The person to whom the bill is endorsed is called the endorsee.
• The Holder : Holder of bill of exchange means any person who is legally entitled to the possession of it and to receive or recover the amount due thereon from the parties. He is either the payee or the endorsee. The finder of a lost bill payable to bearer or a person in wrongful possession of such instrument is not a holder.
• Drawee in case of need : When the bill or in any endorsement thereon the name of any person is given in addition to the drawee to be resorted to in case of need such person is called a “Drawee in case of need”. He is merely in the position of a drawee who has not accepted the bill. The bill cannot be presented to him for acceptance but only for payment.
• Acceptor for Honour : Any person may voluntarily become a party to a bill as an acceptor by accepting it for the honour of the drawer or of any person. When the original drawee refuses to accept or refuses to furnish better security when demanded by a notary, any person may step in to safeguard the honor of the drawer or any endorser and bind himself by an acceptance. The effect of such acceptance is that the bill is treated as alive and is not considered to be dishonored till it is dishonored by the acceptor for honour.

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