Parties to Various Instruments

We have already mentioned about some parties to instruments when we have discussed the meaning of negotiable instruments. Let us now identify the parties to various instruments.




Parties to a Bill of Exchange

Drawer and Drawee: A person who has made a bill of exchange is a ‘drawer’ whereas a person who is directed by the drawer to pay the money is called the ‘drawee’.

Payee: The person named in the instrument to whom or to whose order the money is directed to be paid by the instrument.

Endorser and Endorsee: When the holder transfers or indorses the instrument to someone else, the holder is called ‘endorser’ and the person to whom it is indorsed is called ‘endorsee’.

Holder: The person who is legally entitled to the possession of the negotiable instrument in his own name and to receive the amount thereof

 

Parties to a Promissory Note

Maker: The person who promises to pay the amount stated in the note.

Payee: The person to whom the amount of the promissory note is payable.

Holder: Either the payee or the person to whom the promissory note might have been indorsed.

 

Parties to a Cheque

Drawer: The person who had deposited money in the bank and drawn the cheque.

Drawee: The banker on whom the cheque is drawn.

Payee: The person who is entitled to receive the payment of a cheque.

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