Question

In a classroom debate Mohan argued that a bill of exchange and promissory note are same but syam disagree with him and states that they are different, whose argument is correct? Give reason.

Answer 1

The argument of Syam is correct. There are some difference between bill of exchange and promissory note.

Basis	Bill of Exchange	Promissory Note
1. Drawer	It is drawn by the creditor.	It is drawn by debtor
2. Parties	There are 3 parties namely, drawer, drawee and the payee	There are two parties namely the drawer and the payee
3. Payee	Drawer and payee can be the same party	Drawer cannot be the payee of it
4. Order or promise	It contains an order to make payment	It contains a promise to make payment
5. Acceptance	It needs acceptance by the drawee	It does not need any acceptance
6. Liability	The liability of the drawer arises only if the acceptor does not pay	The drawer has the primary liability to pay