Drawer order
Payer Or: Drawee
Bearer pay Or: Payee
An Example of a Draft
Drawn under Bank of China, London Irrevocable L/C No.2003056 Dated Jan.10,2005 Payable with interest 5.2% per annum No. 20042 EXCHANGE for HK$236,000.00 China Shanghai at
Draw- presentation-acceptance-payment/endorsement/ dishonor-recourse.
Drafts are negotiable instruments and may be sold.
• Three parties: 1. Drawer 2. Drawee 3. Payee
The Payee might be:
1. Restrictive payee
• Pay …Co. only • Pay …Co. not transferable
2. To order ---- (requiring endorsement when transferring)
• Pay …Co. or order • Pay to the order of …Co.
2.According to the Shipping documents attached or not: ----Clean Bill (no conditions) ----Documentary Bill
3.According to who the drawer is: ----Commercial Bill ----Banker’s Bill
tendency of going down)--inconvertible
Section I Instrument of Payment
Instrument of payment is a document that has monetary value, or is a financial transaction.
3. To bearer ---- (no endorsement)
• bearer • Pay …co. or Bearer
The Time of payment might be:
30days sight of this FIRST Exchange (Second of Exchange being unpaid) pay to the order of Bank of China the sum of Hongkong dollars TWO HUNDRED AND THIRTY-SIX THOUSAND ONLY TO: J&H COMPANY 85 MALYA ROAD HONG KONG
※ Under banker’s draft, the drawer and drawee are all bankers. ※ Under commercial draft, the drawer is commercial firm, but the
drawee may be a commercial firm or bankers.
China Machinery & Equipment Import &Export Corp., Chengdu Branch
Classification of drafts
1.According to time when the draft falls due: ----Sight (Demand ) Bill(Draft) ----Time ( Usance) Bill (Draft)
International Settlement
Content
• 1 Instruments of Payment • Draft
Promissory Note Cheque • 2 Modes(方式) of Payment Remittance（汇寄） Collection L/C • 3 Payment Clause in S/C
Kinds of currency
1. ——Currency of the importing country ——Currency of the exporting country ——Currency of the a third country USD, Japanese yen, pound sterling, EURO, etc.
2. According to changing status of exchange rate ——Hard currency: (with stable exchange rate and has a
tendency of going up)--convertible ——Soft currency: (exchange rate is not stable and has
• Bill of Exchange • Promissory Note • Check
Bill of exchange
1) Definition of Bill of Exchange “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”.