Describe five essentials of a valid bill of exchange
Essentials of a valid bill of exchange
- It must contain certain parties;-all three must be certain.
- It must be signed by the drawer – The instrument will be complete only when it is signed by the drawer.
- Addressed by one person to another.
- The sum is payable to a specified person, his order or the bearer.
- 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 condition i.e. not a request.