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Bill of exchange

A written order from one person (the payor) to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand or at some fixed future date, a certain sum of money, to either the person identified as payee or to any person presenting the bill of exchange.

A written order from one person (the payor) to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand or at some fixed future date, a certain sum of money, to either the person identified as payee or to any person presenting the bill of exchange.

A check or cheque is the most common form of bill of exchange where the order is given to a bank in regards to monies on deposit by the payor.

Judicially, Clayton Town Site Co. v. Clayton Drug Co. (Supreme Court of New Mexico, USA, 1915, 147 P. 460):

"A bill of exchange is an unconditional order in writing addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand or a fixed or determinable future time, a sum certain in money, to order or to bearer."

Canada has a federal Bill of Exchange Act (1985 RSC B-4) which defines a bill of exchange at ¶16 as:

"A bill of exchange is an unconditional order in writing, addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay, on demand or at a fixed or determinable future time, a sum certain in money to or to the order of a specified person or to bearer.

"An instrument that does not comply with (these) requirements, or that orders any act to be done in addition to the payment of money, is not, except as hereinafter provided, a bill.
 
"An order to pay out of a particular fund is not unconditional within the meaning of this section, except that an unqualified order to pay, coupled with an indication of a particular fund out of which the drawee is to reimburse himself or a particular account to be debited with the amount, or a statement of the transaction that gives rise to the bill, is unconditional."

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Unless otherwise noted, this article was written by Lloyd Duhaime, Barrister, Solicitor, Attorney and Lawyer (and Notary Public!). It is not intended to be legal advice and you would be foolhardy to rely on it in respect to any specific situation you or an acquaintance may be facing. In addition, the law changes rapidly and sometimes with little notice so from time to time, an article may not be up to date. Therefore, this is merely legal information designed to educate the reader. If you have a real situation, this information will serve as a good springboard to get legal advice from a lawyer.

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