Question

Differentiate between Bill of Exchange and Promissory Note.

Answer 1

Difference between Bill of Exchange and Promissory Note:

Bill of Exchange	Promissory Note
1. Bill of Exchange is defined under Section 5 of the Negotiable Instrument Act, 1881.	1. Promissory Note is defined under Section 4 of the Negotiable Instrument Act, 1881.
2. Acceptance is necessary in case of Bill of Exchange.	2. No such question of acceptance arises in case of Promissory Note.
3. Bill of Exchange contains an order for payment	3. Promissory Note contains promise for payment.
4. The drawer of Bill of Exchange is the creditor.	4. The drawer of Promissory Note is the debtor.
5. The dishonour of Bill of Exchange may be noted to the Notary.	5. No such Noting is required in case of a Promissory Note.
6. There may be three pen-ties to the Bill of Exchange: Drawer, Drawee and Payee.	6. There are two parties to the Promissory Note: Drawer and the Receiver.
7. The drawer of Bill may become the payee for Bill of Exchange.	7. The drawer of the Bill cannot be the receiver for Promissory Note
8. Bill of Exchange payable on presentation does not require a stamp.	8. Stamp is required in all kinds of Promissory Notes.