Difference between promissory note and bill of exchange.

Bills of exchange are of two main types - simple and transferable. What are the features of both?

What is a promissory note?

Under a promissory note it is customary to understand a security that establishes a person's obligation to pay the amount of money on the current debt in the amount that is recorded directly in the document. A promissory note by its legal nature is very close to an IOU: the difference between them, in fact, is that the latter cannot be used as a basis for claiming debt by third parties.

A promissory note indicates that a certain citizen or company undertakes to pay, upon presentation of the relevant document, such and such a sum of money in favor of such and such a subject - another individual or organization... The text is usually written from a third party ("undertakes to pay").

In a promissory note, the following is required:

• indication of the name of the document - “promissory note”;
• an unconditional promise to pay a specific amount;
• an indication of the date and place of drawing up the document, making the payment;
• the name of the payee or the name of the company, if it is the entitled party;
• The presence of the signature of the drawer.

If the date of payment is not indicated in the promissory note, then payment under it is made by the drawer upon presentation of the document.

What is a bill of exchange?

Under a bill of exchange it is customary to mean a document that is signed by the drawer and contains an order for some other entity to pay the amount specified in the bill upon presentation of the document by the holder of the bill. In this case, the relevant entity must accept the bill - that is, recognize its obligation to pay the amount of money specified in the document. As a rule, the subject agrees to do this by virtue of the fact that he himself owes the drawer some amount, and at the time of acceptance of the bill of exchange "repays" it in whole or in part to him.

A bill of exchange usually states that a certain citizen or firm asks such a person or organization to pay, upon presentation of the bill of exchange, such and such an amount in favor of such and such a company, or natural persons. The text is usually written in the first person ("please pay").

The bill of exchange is obligatory:

• indication of the same details as are present in the bill of exchange;
• an indication of the name of the payer or the name of the organization, which the drawer asks to fulfill the obligations under the document.

A bill of exchange is accepted by a simple signature of the payer on the front of the document. He can also write on the document that he is accepted.

Comparison

The main difference between a promissory note and a bill of exchange is that, according to the first document, the debtor undertakes to pay the agreed amount to the holder himself, and according to the second, he asks to fulfill the corresponding obligation of another person or organization (which, most likely, they themselves owe something to the drawer).

Certain differences can be observed in the structure of promissory notes - in a simple document, the text establishing a promissory note is usually written in the third person, in a transferable one - from the first. But this is not the main criterion: it is important to correctly reflect who exactly is obliged to pay off the bill holder. A bill of exchange is valid only upon its acceptance by a person or organization that the drawer asks to extinguish the obligation under the document.

In other aspects, the legal characteristics of both types of bills are the same: the holder of a bill can transfer them to third parties by endorsement, the rules for calculating interest and reclaiming debt for both documents are the same.

Having determined what is the difference between a promissory note and a bill of exchange, we fix the conclusions in the table.

Table