A bill of exchange is a three-party, non-interest, written order that is created by the first party, the drawer, and it presents an order for the second party, or the payor, to make a sum payment to a third-party, the payee. If it is a sight bill, the payment is to be made immediately, and if it is a term bill, the payment is set for a future date. The payor accepts the draft by signing it, converting the draft into a post-dated check and a binding contract.
Bills of exchange are similar to checks and promissory notes, but bills of exchange are transferable. The orders can be drawn up by individuals or banks, and they can bind one party to pay a third party that was not involved in its creation. If a bill of exchange is issued by a bank, they are referred to as bank drafts. Similarly, if a bill is issued by an individual, they are referred to as trade drafts.
At the Geneva Convention in 1930, a uniform law of standards for bills of exchange and promissory notes was set. Bills of exchange must contain all information that is pertinent to the parties involved as well as the payments to be made.Learn More
The most compelling reason people work is usually to earn money. However, people also work to engage in a personal passion, to achieve personal fulfillment, to challenge themselves, to grow and to have a place to belong.Full Answer >
A market economy is based on the principles of supply and demand, and lets business survive or fail without much interaction from the government. A pure market economy is impractical to implement, most market economies around the world have a component of government influence.Full Answer >
A barter system is an old system which involves exchanging goods and services for other goods and services. This system works effectively in situations where there is no a common measure of value to be used in trade.Full Answer >
A command economy is one in which all economic decisions are planned by a centralized authority. The governments who practice this form of economics control the overall economy by creating laws and regulations that control both state-owned and privately owned businesses.Full Answer >