The bill of exchange is a document created with the purpose that merchants and intermediaries do not load merchandise or money when making a commercial exchange.The bill of exchange is responsible for transferring a value in writing , either monetary or in kind (merchandise or property), from one person to another. The nature of that value is declared in the document.

Its origin dates back to the times of the ancient merchants, in which the delivery and payment of merchandise was guaranteed with a bill of exchange. In the beginning, they could only be collected by the person whose name was written on it . As of today, the bill of exchange is capable of being endorsed.

What is the bill of exchange for?

The bill of exchange has various functions as a commercial document , in summary it serves to:

  • Represent a commitment and agreement between two parties
  • Transfer a value from person to person
  • Support a business operation
  • Prevent cash or merchandise from being handled between people
  • Declare which people participate in the exchange
  • Determine the date on which the debt will be paid
  • The debtor is obliged to pay or deliver the item within the agreed period

The bill of exchange represents a commitment and an agreement between the people who make up the commercial exchange. In this commitment, the word of the obligor or debtor is exposed, and it is generally used as a form of financing, promise of payment or guarantee, which will allow waiting for the payment to be made at the appropriate time for the debtor.

Thus, the terms are established, which can be fortnightly, monthly, or until the merchandise is delivered. The bill of exchange can be used in business and private terms.

Due to its civil nature , the bill of exchange is a document outside the banking or state intervention. Despite this, the state has the power to take legal action in case of non-compliance , opening a civil order instance, so that the corresponding collection is made.

The bill of exchange is used to carry out transactions and loans.

The bill of exchange is subject to deadlines , which must be met: they are attached to the laws of each country or locality, which determine the validity period and the expiration date of the document.

The bill of exchange is used for a person, whether physical or moral, to commit to deliver an amount of money or an item , within a specified period.

The moment of collection is at the discretion of the parties that issue the bill of exchange, that is the practical advantage of this document.

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