bill of exchange


bill of exchange

Short-term negotiable financial instrument consisting of a written order addressed by the seller of goods to the buyer requiring the latter to pay a certain sum of money on demand or at a future time. Bills of exchange are often used in international transactions, and the holder of such a bill may redeem it in cash immediately by selling it to a bank at a discount. Bills of exchange used in domestic transactions are sometimes called drafts. See also promissory note.

This entry comes from Encyclopædia Britannica Concise.
For the full entry on bill of exchange, visit Britannica.com.

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