Legal Definitions - bill of exchange

A bill of exchange is a type of financial document that is used to transfer money from one person or organization to another. It is a written order that requires one party to pay a fixed amount of money to another party either on demand or at a predetermined date.

For example, if a company in the United States wants to buy goods from a supplier in Europe, they may use a bill of exchange to make the payment. The company would write a document that orders their bank to pay a certain amount of money to the supplier's bank. The supplier can then take this document to their bank and receive the payment.

Another example of a bill of exchange is a check. When you write a check, you are essentially creating a bill of exchange that orders your bank to pay a certain amount of money to the person or organization you are giving the check to.

Overall, a bill of exchange is a useful tool for transferring money between parties, especially when they are located in different countries or regions. It provides a written record of the transaction and ensures that both parties are aware of their obligations.