Question
Describe five essentials of a valid bill of exchange.
Answer
Essentials of a valid bill of exchange:
- It must be in writing – A bill of exchange cannot be oral.
- It must contain an express order to pay – This feature of a bill of exchange distinguishes it from a promissory note.
- The order to pay must be unconditional – The order to pay should not depend upon a
- It must contain certain parties;-all three must be certain.
- It must be signed by the drawer – The instrument will be complete only when it is signed by the drawer.
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