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What is the difference between Cheque Promissory note and Bill of exchange?
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The following are the main differences between a Bill of Exchange and a Promissory Note: 1. A Bill of Exchange is an unconditional order to pay money, whereas a promissory note is an unconditional undertaking or promise to pay money to a certain person. 2. In a Bill of Exchange, there are three parties, viz., the drawer, the drawee and the payee. In a Promissory Note, there are only two parties, viz., the Maker and the Payee. 3. In case of usance (Time) bill, acceptance of the bill is necessary, whereas in a promissory note no such acceptance is required. 4. While foreign bill of exchange is drawn in sets of three, foreign promissory note requires no such sets. 5. In case a foreign bill of exchange is is dishonoured, protesting is compulsory. But when a foreign promissory note is dishonoured, no protesting is required. 6. In case a bill of exchange is dishonoured, a notice of dishonour is required to be given by the holder to the maker of the bill (= drawer). However, in case a promissory note is dishonoured, no notice of dishonour is required to be given by the holder of the maker of the promissory instrument. 7. The liability of the drawer (= maker) of a bill of exchange is secondary, whereas, the liability of the maker of a promissory note is primary. 8. A bill of exchange is drawn for financing trade, whereas, the liability of the maker of is a promissory note is primary. 9. When a bill of exchange is made payable to the bearer, it is not considered as illegal. But a Promissory Note, which does not contain the payee's name, but states that it is payable to bearer, it becomes illegal. 10. In a bill of exchange, the drawee can put conditions subject he will accept the bill. but in a promissory note a maker cannot put any conditions on it. M.J. SUBRAMANYAM, BANGALORE

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