Bill of Exchange
A Bill of Exchange is a written financial document that orders one party to pay a specific amount of money to another party at a predetermined date. It is commonly used in international trade to facilitate transactions between buyers and sellers. The document serves as a guarantee of payment, making it easier for businesses to manage cash flow and credit.
In a typical scenario, the party that issues the bill, known as the drawer, instructs another party, called the drawee, to pay the amount to a third party, known as the payee. This instrument can be transferred to others, allowing for flexibility in financial dealings and enhancing trust in commercial transactions.