The bills of exchange are a kind of negotiable instruments generally arising out of trade transactions. Demand bills, Usance bills, Clean bills, Documentary Bills, Accommodation bills, etc. are the examples of bills of exchange in usage for different types of trade transactions. A cheque is also a kind of bill of exchange. However, cheque has some peculiarities from other bills of exchange. Let’s find out here the difference between a bill of exchange and a cheque.
|Bill of Exchange
|Bill is drawn to some person or firm.
|Cheque is always drawn on a bank.
A Bill is payable after sight must be accepted by the drawee or someone else on his behalf prior to the presentation of the same for payment.
A Cheque is presented for payment without any prior acceptance by the drawer.
|Bill may be drawn payable on demand or expiry of the certain period, after the date/after sight.
|Cheque is drawn payable on demand
The grace period of three days allowed in case of usance bills.
|No grace period is allowed for payment of cheque.
The drawer of a bill is discharged from his liability if the bill is not presented for payment
The drawer of a cheque is discharged from his liability only if he suffers any damage by the delay in presenting the cheque.
No need to cross the bills
|Cheque may be crossed
Bills of exchange should be properly stamped
No need of stamp duty payable on cheque
|Bills payable on DEMAND cannot be drawn payable to bearer.
|Cheques can be drawn payable to bearer
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