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Question
Which of the following refers to an instrument in writing containing an unconditional order, signed by maker directing a certain person to pay on demand or at fixed or determinable future time a certain sum of money only to or to the order of, a certain person or to the bearer of the instrument?
Which of the following refers to an instrument in writing containing an unconditional order, signed by maker directing a certain person to pay on demand or at fixed or determinable future time a certain sum of money only to or to the order of, a certain person or to the bearer of the instrument?
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Solution
The correct option is B Bill of exchange
The term Bill of Exchange has been defined under section 5 of the Negotiable Instruments Act, 1881. A bill of exchange is generally drawn by the creditor on his debtor. It should be accepted either by the debtor or any person(s) on his/her behalf. Before its acceptance by the debtor, it is just a draft. It should be accepted either by a person upon on whom it is drawn or someone else on his/her behalf. The stage at which the purchaser of goods signs the draft and writes 'Accepted' on it, becomes a bill of exchange.
The term Bill of Exchange has been defined under section 5 of the Negotiable Instruments Act, 1881. A bill of exchange is generally drawn by the creditor on his debtor. It should be accepted either by the debtor or any person(s) on his/her behalf. Before its acceptance by the debtor, it is just a draft. It should be accepted either by a person upon on whom it is drawn or someone else on his/her behalf. The stage at which the purchaser of goods signs the draft and writes 'Accepted' on it, becomes a bill of exchange.
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