Promissory Notes
A promissory note is a written, unconditional promise made by one party (the maker) to pay a specific amount of money to another party (the payee) either on demand or at a specified future date. It is a legally binding document that ensures the holder’s right to receive the payment as per the terms agreed upon, and it can be transferred to another party if required.
1.Bills of Exchange
A bill of exchange is a written order issued by one party (the drawer) to another party (the drawee), directing them to pay a specific amount of money to a third party (the payee). Bills of exchange can be classified as sight drafts, which are payable immediately upon presentation, or time drafts, which are payable on a specified future date, providing flexibility in financial transactions.
2.Cheques
A cheque is a written order from the drawer to their bank, instructing the bank to pay a specified sum of money from the drawer’s account to the designated payee. Cheques are commonly used in everyday financial transactions, offering a secure and convenient method of payment. If there are insufficient funds in the drawer’s account, the cheque may be dishonoured.