But there are certain peculiar rules relating to the latter which arise from the fact that the relationship of banker and customer subsists between the drawer and drawee of a cheque.
The mere signature of the drawee is sufficient (Sec.
Normally a bill is discharged by payment in due course, that is to say, by payment by the drawee or acceptor to the holder at or after maturity.
By the acceptance of a bill the drawee becomes the principal debtor on the instrument and the party primarily liable to pay it.
The whole set then constitutes one bill, and the drawee must be careful only to accept one part, otherwise if different accepted parts get into the hands of different holders, he may be liable to pay the bill twice (Sec.
It seems to follow from this peculiarity, that the drawee must have been regularly advised by the drawer.
It is not a direct promise to pay; but it is an undertaking, by the drawer, that the drawee shall accept and pay; and the drawer is answerable only when the draweefails to pay.
No precise time is fixed by law at which bills payable at sight or a certain number of days after sight, must be presented to the drawee for acceptance; though an unreasonable delay might discharge the drawer.
If the drawee acknowledges that this is the case, he signifies it when the bill is presented to him, by writing on the back the word "accepted," together with his name.
Now if the drawer and drawee of a bill are persons of good credit, a banker will readily discount such a bill, that is, buy it up for the sum due, after subtracting interest at the rate of say five per cent.
The bill forms good security, because, when accepted, John Smith is bound to pay the thousand pounds when due, and if he fails, the drawee is liable.
And if the note is addressed to a drawee he must be named or indicated with reasonable certainty.
The acceptance of a bill is the signifying by the drawee that he has assented to the drawer's order, and must be in writing.
A bill of itself does not operate as an assignment of the funds in the hands of the drawee available for its payment, nor is the drawee liable on a bill until he accepts or agrees to pay it.
Presentment for payment, of course, is needful to charge thedrawee and indorsers.
Nor need presentment for payment be made when after using reasonable diligence it cannot be made, or where the drawee of a bill is a fictitious person, and lastly where presentment, express or implied, has been waived.
The drawee is allowed twenty-four hours after presentment to decide whether or not he will accept the bill; but the acceptance, if given, dates from the day of presentation.
The bank notifies the drawee of the draft, who is the man who has agreed to buy the goods, that the bill of lading with the draft are at the bank, and that the buyer may have the bill of lading when he pays the draft.
If the bill of exchange is paid by the drawee on presentment at his city, he is given the bill of lading at once and he gets what he wants.
It is not always possible for the drawee to know whether he has sufficient funds to justify an acceptance, and so the Act gives him twenty-four hours within which to make up his mind.
As soon as the drawee accepts the bill, he then becomes known, not as the drawee but as the acceptor and he is the party primarily liable on the bill, that is, he assumes responsibility for its payment.
It sometimes allows the drawee to take possession of the bill of lading and change the routing of the car.
Now I feel that the drawer and all of the indorsers are financially irresponsible and I would rather have the acceptance of the drawee for $500 than nothing.
There are three or four indorsers upon it and I take it to the drawee to have him accept.
The drawee will accept it by writing across the face of it "Accepted," signing his name and perhaps adding "Payable at the First National Bank.
In case these conditions are complied with, and the drawee does not accept the bill or pay the bill after acceptance, the payee may hold the drawer.
After a drawee has accepted a draft, he is bound by its terms.
A draft is protested by being presented by a notary public, who, by formal written instrument, declares the refusal of the drawee to accept.
This is true of notice to the drawer for failure of a drawee to accept, as well as for failure of an acceptor to pay.
The person to whom a draft is directed is called the drawee or acceptor.
The liability of an acceptor for honor is that if the bill is presented to the drawee at maturity for payment and refused, and notice thereof given the acceptor for honor, the latter will pay it.
After acceptance, the draweeis called the acceptor.
Drafts payable at sight, or after sight, must be presented to the drawee for acceptance.
The drawee may accept by signing the instrument, by stating his acceptance on a separate piece of paper, by oral acceptance, or even by conduct making apparent his intention to accept.
The above list will hopefully give you a few useful examples demonstrating the appropriate usage of "drawee" in a variety of sentences. We hope that you will now be able to make sentences using this word.
