Here we detail about the difference between bill of exchange and promissory note.
Bill of exchange:
1. In the case of bill of exchange, there may be three parties, viz., the drawer, the drawee and the payee.
2. Bill of exchange contains an order to make the payment.
3. Bill of exchange is drawn by the creditor.
ADVERTISEMENTS:
4. In the case of bill of exchange, drawer and payee can be the same person.
5. Bill of exchange requires acceptance of either the drawee or any person on behalf of the drawee.
6. In case of bill of exchange, the liability of the drawer is secondary and conditional.
7. In case of dishonour, noting becomes important.
ADVERTISEMENTS:
8. In case of local bill, only one copy is to be prepared. However, in the case of foreign bill three copies are to be prepared.
9. In the case of bill of exchange payable on demand, stamps are not required to be fixed. However, on the other bills stamps are required to be fixed.
Promissory Note:
1. In the case of promissory note there are two parties, viz., the maker and the payee.
2. Promissory note contains a promise to make the payment.
ADVERTISEMENTS:
3. Promissory note is drawn by the debtor.
4. In the case of promissory note, drawer cannot be the payee.
5. Promissory note does not require any acceptance because in this case maker himself promises to pay.
6. In the case of promissory note, the liability of the drawer (maker) is primary and absolute.
ADVERTISEMENTS:
7. In case of dishonour, there is no need for noting.
8. In all cases, only one copy is to be prepared.
9. In the case of promissory note stamps are required to be fixed.