In this article, you will discover the format of the bill of exchange.
Content of format of bill of exchange
1. Date:
The date on which the bill has been drawn must be written at the top right-hand corner below the address of the drawer. The date of the bill is essential for the calculation of the maturity date. A bill without a date has no meaning.
2. Term:
The term of the bill must be specified in months or in days.
3. Amount:
The amount of the bill in figures should be specified below the stamp and the amount in words must be specified in the body of the bill.
4. Stamp:
Stamps of proper value according to the Indian stamp ACT,1889 should be attached.
5. Parties:
The name of the drawer, drawee, and payee and their addresses must be mentioned in the bill of exchange.
6. ‘For value received:
Law does not consider agreements that are made without consideration. Consideration means in lieu of, and in the context of the bill of exchange, it means that the bill is issued in exchange for some benefit received.
7. Acceptance:
The last content of the format of the bill of exchanges is acceptance. A bill of exchange drawn by a drawer is termed a draft. It must be presented to the drawee of acceptance.
When the drawee signs with his name along with the date across the face of the bill, with the words ‘Accepted”, the bill is said to be accepted and this act of drawee is called acceptance of the bill. Drawee cannot be made responsible for payment of the bill before the acceptance of the bill. Only upon approval, the draft becomes a bill of exchange .
An example of the format of the bill of exchange is given below:
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