Home › CA Foundation › businesslaw › The Negotiable Instruments Act, 1881 › Which is a correct distinction between a promiss…
Which is a correct distinction between a promissory note and a bill of exchange?
AA promissory note contains a promise and needs no acceptance, while a bill contains an order and requires acceptance by the drawee
BA promissory note requires acceptance; a bill does not
CA bill cannot be payable to bearer ever
DA promissory note has three parties
Answer & Solution
Correct answer: A. A promissory note contains a promise and needs no acceptance, while a bill contains an order and requires acceptance by the drawee
A promissory note is a promise (two parties, no acceptance); a bill is an order (three parties) needing the drawee's acceptance. A note cannot be payable to bearer, whereas a bill can (but not to bearer on demand).
Related questions
Under Section 117, an endorser who, being liable, has paid the amount due on a dishonouredUnder Section 64, promissory notes, bills and cheques must, in default of which the other Under Section 63, when a bill is presented to the drawee for acceptance, he may be allowedUnder Section 139, when a cheque is dishonoured, it is presumed (unless the contrary is prUnder Section 138, the cheque must have been presented to the bank within:For an offence under Section 138, the payee must give notice demanding payment within 30 dUnder Section 138, dishonour of a cheque for insufficiency of funds is punishable with impUnder Section 46, with respect to negotiation, delivery of the instrument is: