(a) Define a bill of exchange.
(b) State six essential features of a bill of exchange.
(c) List the parties to a bill of exchange.
Explanation
(a) A bill of Exchange is an unconditional order in writing, addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed, to pay on demand or at a fixed or determinable future time, a sum of money to the order of a specified person.
(b) The features of bill of exchange are:
(i) The bill must be addressed by one person to another/ the seller.
(ii) The bill must be signed by the drawer and finally signed by the drawee.
(iii) It must be in writing.
(iv) The amount on the bill must be written in both words and figures.
(v) The order must be unconditional.
(vi) The time of payment must be specified either on demand at a fixed or determined future date.
(vii) The bill requires the buyer to pay a stated sum of money on demand or in a fixed future date
(viii) it must be paid to the order of a specific person or to bearer.
(c) Parties to a bill are:
(i) Drawer
(ii) Drawee /Acceptor
(iii) Payee/Drawer.