Meaning of Bill of ​Exchange

According to the Negotiable Instruments Act 1881, a bill of exchange is defined as “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”.

Some of the characteristics of the Bill of Exchange:

• It is important to have a bill of exchange in writing.
• It must contain a confirmed and unconditional order to make a payment and not just the request.
• The order should not have any condition.
• The bill of exchange amount should be definite.
• Fixed date for the amount to be paid.
• The bill must be signed by both the drawee and the drawer.
• The amount stated on the bill should be paid on-demand or on the expiry of a fixed time.
• The amount is paid to the beneficiary of the bill, specific person, or against a definite order.

Therefore, in the above question option no. 3 i.e. The promise to pay must always be conditional, is incorrect.