A bill of exchange is a commercial document that allows a payment order for a certain amount of money to be made. In every bill of exchange there are three people involved: the drawer, the drawee and the beneficiary.
The spinner is the creator of the letter. The drawee is the debtor, that is, the liability of the obligation and who has to pay the amount of money indicated in the document.
The beneficiary is the creditor and who is entitled to collect the amount of money that appears in the document. In other words, the bill of exchange is an economic mechanism in which three people are involved. Person A (the drawee) gives a payment order to person B (the drawee), who will in turn pay money to person C (the beneficiary).
Bills of exchange are used to transfer money between two people without the intervention of a bank or the state.
It can be affirmed that the bill of exchange is a commitment in which the word of the drawer is exposed. It is a payment method that is considered a credit title that can be used in commercial activities or between individuals.
Elements of the bill of exchange
In bills of exchange there are fixed and permanent elements and other elements are those that do not always appear and are variable. The fixed elements are the names of the drawer, the drawee and the beneficiary, the date of issuance of the document and the place of payment (in commercial law terminology these elements are known as relative elements).
Variable elements are those that may or may not appear in the bill of exchange, such as a possible guarantor, endorsers, endorsers of the endorsers or endorsees (these elements refer to possible participants in the bill of exchange and are therefore called personal elements ).
Bill of Exchange Requirements
For a bill of exchange to be legally valid, it must meet a series of requirements: the explicit indication in the document that it is a bill of exchange, the specification of the place and the exact day on which it is signed, the order to pay a sum of money to the drawee, the drawee’s name, the place and time of payment, the name of the person to whom the payment is to be made and, finally, the drawee’s signature.
There is, on the other hand, the requirement of acceptance of the bill of exchange, which implies that the word “I accept” appear, as well as the place where the acceptance is made, the date it is made and the signature of the drawee. .
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