Definition Of Bill of Exchange :
According to the Negotiable Instruments Act, 1881, ‘Bill of Exchange is an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of a certain person or to the bearer of the instrument’.
An analysis of the definition given above highlights the following important features of a bill of exchange.
i. It is a written document.
ii. It is an unconditional order.
iii. It is an order to pay a certain sum of money.
iv. It is signed by the drawer.
v. It bears stamp or it is drafted on a stamp paper.
vi. It is accepted by the acceptor.
vii. The amount is paid to drawer or endorsee.