NEGOTIABLE INSTRUMENTS – Bill of Exchange Question and Answer

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 the drawer – The instrument will be complete only when it is signed the drawer.
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