We have already mentioned about some parties to instruments when we have discussed the meaning of negotiable instruments. Let us now identify the parties to various instruments.
Parties to a Bill of Exchange
Drawer and Drawee: A person who has made a bill of exchange is a ‘drawer’ whereas a person who is directed by the drawer to pay the money is called the ‘drawee’.
Payee: The person named in the instrument to whom or to whose order the money is directed to be paid by the instrument.
Endorser and Endorsee: When the holder transfers or indorses the instrument to someone else, the holder is called ‘endorser’ and the person to whom it is indorsed is called ‘endorsee’.
Holder: The person who is legally entitled to the possession of the negotiable instrument in his own name and to receive the amount thereof
Parties to a Promissory Note
Maker: The person who promises to pay the amount stated in the note.
Payee: The person to whom the amount of the promissory note is payable.
Holder: Either the payee or the person to whom the promissory note might have been indorsed.
Parties to a Cheque
Drawer: The person who had deposited money in the bank and drawn the cheque.
Drawee: The banker on whom the cheque is drawn.
Payee: The person who is entitled to receive the payment of a cheque.