7.2 Types of Negotiable Instruments

7.2.1 ChequesBill of exchange drawn on a banker, payable on demand (Unit 5 details the payment mechanics).7.2.2 Bills of ExchangeUnconditional order: drawer → drawee (acceptor) → payee. Three parties in the instrument's minimal form; usance or demand.7.2.3 DraftIn banking usage, a draft is a bill drawn by one bank on another (bank draft) — the bank's own credit replaces the drawer-customer's. A demand draft is the common remittance instrument under the Negotiable Instruments Act, 2034.7.2.4 Promissory NoteUnconditional promise (not order) by the maker to pay a certain sum to, or to the order of, a named payee. Two parties; no acceptance needed.PointPromissory noteBill of exchangeChequeNaturePromiseOrderOrder on a bankerParties233 (drawer-drawee bank-payee)AcceptanceNot neededYes (usance)No — payable on demandDrawee—Any personAlways a bankerDishonour remedyMakerAcceptorDrawer's account/bank