Difference between Bill of Exchange and Promissory Notes

 Difference between Bill of Exchange and Promissory Notes

                        Bill of Exchange

                          Promissory Notes

v  It is an unconditional order directing a certain person to pay a certain sum of money

v  Generally, there are three parties in the bill of exchange- the drawer, the drawee and the payee.

v  A bill of exchange requires acceptance by the drawee after if is drawn by the drawer.


v  Bill of exchange may be payable either on order or to the bearer.

v  In case of Bills of exchange notice of dishonour is given to all parties concerned.

v  The maker (Drawer) of the Bill is liable only when drawee does not make payment.

v  In Case of foreign bills protest is necessary if it is required as per law of the country where bill has been drawn.

v  It is an unconditional promise to pay a certain sum of money.

v  There are two parties in a promissory note- the promisor or maker and the payee.


v  This does not require acceptance. It is written by the person who will pay the amount.

v  Promissory note can not be payable to bearer.


v  In case of promissory note, notice of dishonour is not required.

v  The maker is primarily liable to pay the amount.

v  Protest is not required for promissory note.

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