Explain the following terms: 1. Drawer 2. Drawee 3. Payee 4. Term of a bill

Explain the following terms:

  1. Drawer
  2. Drawee
  3. Payee
  4. Term of a bill
  1. Drawer: Drawer is the person who makes the bill of exchange and is the person who has given credit to the person on whom the bill of exchange is drawn.
  2. Drawee: Drawee is the person on whom the bill of exchange is drawn for acceptance. He is the purchaser of the goods/services to whom the credit has been granted by the drawer.
  3. Payee: Payee is the person to whom the amount is payable which is mentioned in the bill of exchange. The payee may be the drawer himself or any other third person on the order of the drawer of the bill.
  4. Term of a bill: The period between the date on which the bill is drawn and that on which the bill becomes due for payment is called the term of the bill. In case, a bill is drawn after sight, the term of the bill starts from the date of acceptance of the bill. In case, the bill is drawn after date, the term of the bill starts from the date of drawing the bill.