Bill Of Exchange Legal Meaning and Definition

Here is a simplified definition of the legal term Bill Of Exchange.

Bill of Exchange (noun)

A Bill of Exchange is a written order used primarily in international trade that binds one party to pay a fixed sum of money to another party on demand or at a predetermined date. It's similar to a written check but usually involves three parties - the drawer (the party that proposes the bill), the drawee (the party expected to pay), and the payee (the party set to receive the money). Essentially, the drawer writes an order for the drawee to pay the payee a set amount.