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Difference Between P. Note & BOE

A Promissory Note is a simple written promise between two parties, issued by the debtor, with primary liability on the maker and no copies allowed. In contrast, a Bill of Exchange involves three parties, is issued by the creditor, has secondary liability, allows for copies, and does not require acceptance. Both instruments are governed by the Negotiable Instruments Act, 1881, but differ in their structure and legal implications.

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7 views1 page

Difference Between P. Note & BOE

A Promissory Note is a simple written promise between two parties, issued by the debtor, with primary liability on the maker and no copies allowed. In contrast, a Bill of Exchange involves three parties, is issued by the creditor, has secondary liability, allows for copies, and does not require acceptance. Both instruments are governed by the Negotiable Instruments Act, 1881, but differ in their structure and legal implications.

Uploaded by

gurpreet
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Benchmark Promissory Note Bill of Exchange

It is a written order that involves three


What is it? It is a simple written promise between two parties.
parties.
Issued by Debtor( (the borrower) Creditor( the lender)
Three parties: drawer, the drawee and a
Parties involved Two parties: maker/drawer and the payee
payee.
Can it have copies? No. Yes.
It is mentioned in section 4 of the Negotiable It is mentioned in section 5 of the
Section
Instruments Act, 1881. Negotiable Instruments Act, 1881.
Drawer’s liability is Primary and absolute Secondary and conditional
Can the payee and
maker be the same No. Yes.
person?
Notice is given to all the parties involved in
No notice is served in the event of dishonoring the
Dishonor the event of dishonoring the negotiable
negotiable tool.
tool.
Acceptance It need acceptance of drawee. It does not need acceptance.

Difference between Promissory Note and Bill of


Exchange

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