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Acceptance of an international bill of exchange is carried out by which of the following?
A. A bank in the drawee’s country
B. The buyer
C. A bank in the drawer’s country
D. The sellerHi sir, I am troubled at which option is correct. Is it A or C?
Because I learned that drawee is usually the bank of the drawer and this bank is the one who signs the acceptance. So is it bank in drawer’s country (which is the “bank” acting as “drawee”) or is it bank in drawee’s country?
If it is A, then why? If it is C, then why?
Thank you sir
If I, in the UK, instruct my bank by cheque to pay you, in Indonesia, I am the drawer and I’m instructing my bank (the drawee) to pay you (the payee)
When my bank hears about this instruction, they will pay and thus the drawee becomes the acceptor
Move away from the concept of cheque payments …
… John Moffat owes me money ($5,000) and I owe you $3,250
I shall write to John (in my capacity as a drawer) and instruct him (the drawee) to pay you (the payee) (say) 90 days after sight
I send the bill to you. You send it to John Moffat who hopefully will sign it indicating acceptance of the liability to pay you in 90 days time. On the event of John signing his acceptance of responsibility he has become the acceptor of that liability to pay you in 3 months’ time the sum of $3,250
In answer to your question, therefore, the acceptor WAS the drawee but, upon signing and indicating acceptance of responsibility to pay the debt, that drawee has become the acceptor
Is that any clearer?
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