Differentiate between a promissory note and bill of exchange.

Difference between promissory note and bill of exchange S. No. Basis Promissory Note Bill of Exchange 1. Definition "A Promissory Note" is an instrument in writing containing an unconditional undertaking signed by the maker, to pay a certain 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 an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of a certain person or to the bearer of the instrument. 2. Nature of Instrument In a promissory note, there is a promise to pay money. In a bill of exchange, there is an order for making payment. 3. Parties In a promissory note, there are only2parties namely: the maker andthe payee In a bill of exchange, there are3parties which are as under: the drawerthe draweethe payee 4. Acceptance A promissory note does not require any acceptance, as it is signed by the person who is liable to pay. A bills of exchange needs acceptance from the drawee. 5. Payable to bearer A promissory note cannot be made payable to bearer. On the other hand, a bill of exchange can be drawn payable to bearer. However, it cannot be payable to bearer on demand.