Eleven differences between a cheque and a bill of exchange

A cheque differences from a bill of exchange in the following respects:

1. Drawee:

A cheque is always drawn on a bank or a banker while a bill of exchange can be drawn on any person including a banker.

2. Acceptance:

A cheque does not require any acceptance while a bill must be accepted before the drawee can be made liable upon it.

3. Payment:

A cheque is payable immediately on demand without any days of grace, but a bill of exchange is normally entitled to three days of grace unless it is payable on demand.

4. Crossing:

A cheque may be crossed but there is no such provision in the case of a bill of exchange.

5. Notice of dishonor:

When a cheque is not met, notice of dishonor is not necessary. Want of assets in the hands of the banker is sufficient notice. It is necessary to give a notice of dishonor in order to make the drawer of a bill liable.

6. Payable to bearer on demand:

A cheque can be drawn payable to bearer on demand. But a bill of exchange cannot be so drawn.

7. Stamp:

A bill of exchange must be stamped, whereas a cheque does not require any stamp.

8. Countermanding payment:

A cheque may be revoked by countermand of payment. The payment of a bill, however cannot be countermanded.

9. Noting and protesting:

A cheque is not noted or protested for dishonor and is generally inland.

10. Presentment:

A bill of exchange must be duly presented for payment otherwise the drawer will be discharged. The drawer of a cheque is not discharged by failure of the holder to present it in due time unless the drawer has sustained damage by the delay.

11. Protection:

A banker is given statutory protection with regard to payment of cheques in certain circumstances. No such protection is available to the drawee or acceptor of a bill of exchange.

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