Difference Between Bills Of Exchange And A check?

Answer 1

The following are the main differences between a cheque and a bill of excyange.

1. A cheque is always drawn on a banker, whereas a bill of exchange can be drawn on any person including a banker.
2. A cheque is always payable on demand, whereas a bill of exchange is either payable on demand or after a fixed period.
3. Payment of a cheque can be countermanded, whereas the payment of a bill of exchange cannot be counter mended.
4. A cheque can be made payable to a bearer, but a bill of exchange can be made payable only to order.
5. A cheque is a means of payment. But a bill of exchange is usually used for financing a trade.
6. In a cheque, the drawer of the cheque is primarily responsible, but in a bill of exchange, the drawee or acceptor is primarily responsible for payment.
7. When a cheque is dishonoured, noting and protesting is not necessary/required. But when a bill of exchange is dishonoured, noting and protesting is necessary.
8. When a cheque is dishonoured, the holder of the cheque need not give notice of dishonour to the drawer to make him liable on the cheque. But on the other hand, when a bill of exchange is dishonoured, notice of dishonour is to be given to all parties, including the drawer to make them liable on the instrument.
9. A cheque can be crossed, but a bill of exchange needs no crossing.

M. J. SUBRAMANYAM, BANGALORE

Answer 2

cheque is a bill of exchange drawn on a special banker and not expressed to be payee otherwise than on demand.