A bill of exchange as, “an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a sum of money only to or to the order of a certain person or to the bearer of the instrument.” A bill of exchange is also called a draft. There are three parties to a bill of exchange namely drawer, drawee and payee. The maker of the bill is called the drawer, the person who is ordered to pay called the drawee and the person to whom or to order the money is directed to be paid is called the payee.
To be of real use, the bill of exchange must be accepted. The mere fact that a bill is drawn by one person upon another does not make the drawee liable for its value. The drawee must accept liability before he can be made liable.