difference between bill of exchange and promissory note

Distinguish or Difference between bill of exchange and promissory note

We can distinguish or difference between bill of exchange and promissory note by the points :


1. Number Of Parties :-

Bill of exchange : There are three parties in the bill of exchange.

Promissory note : There are two parties in the promissory note.



2. Number Written By :-

Bill of exchange : It is written by the creditor.

Promissory note : It is written by the debtor.



3. Order And Promise :-

Bill of exchange : In a bill of exchange it is an order.

Promissory note : In a pro-note it is a promise to make the payment.



4. Acceptance :-

Bill of exchange : It must be accepted by the drawee before.

Promissory note : It requires no acceptance.



5. Dishonour Notice :-

Bill of exchange : In this case notice of dishonour must be given by the holder to the concerned parties.

Promissory note : In case of promissory note there is no need to serve the notice to the maker.



6. Protest :-

Bill of exchange : A foreign bill must be protested in case of dishonour.

Promissory note : Protect is not needed in case of pro-note.



7. In Sets :-

Bill of exchange : A foreign bill can be drawn in sets.

Promissory note : A pro-note cannot drawn in sets.



8. Liability :-

Bill of exchange : The drawer is liable only when the acceptor does not honour the bill.

Promissory note : The liability of pro-note maker is primary.



9. Payable To Bearers :-

Bill of exchange : A bill can be drawn if it is not drawn payable to bearer on demand.

Promissory note : A pro-note can not be drawn payable to the bearer.



10. Drawer and Payee :-

Bill of exchange : In this case drawer or payee may be the same person.

Promissory note : In case of pro-note the drawer can not become the payee.



11. Drawer's Position :-

Bill of exchange : In this case the drawer of accepted bill stands in an immediate relation with the acceptor and not the payee.

Promissory note : The drawer of the pro-note stands immediate relations with the payee.



12. Conditional :-

Bill of exchange : The acceptance of the bill may be conditional with the holders consent.

Promissory note : A pro-note cannot be made conditional.



13. Presentment :-

Bill of exchange : In this case provision relating to presentment for acceptance is applicable.

Promissory note : Such provision is not applicable in case of promissory note.