Simple English definitions for legal terms
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Definition: A time draft is a written order signed by one person (the drawer) directing another person (the drawee or payor) to pay a certain sum of money on a specified date to a third person (the payee) or to bearer.
Example: A company in the United States sells goods to a company in Japan and sends a time draft to the Japanese company's bank. The time draft instructs the bank to pay the amount specified on a specific date to the U.S. company or to the bearer of the draft.
This example illustrates how a time draft is used in international trade to ensure payment at a future date.
Other types of drafts:
Note: A check is the most common example of a draft.