Bill of exchange
Bill of exchange: A written order by one person (the drawer) directing another (the drawee) to pay a fixed sum of money to a third person (the payee) or to bearer. The Uniform Commercial Code calls it a "draft"; a check is a draft drawn on a bank (UCC § 3-104). A bill of exchange has value only if the drawee owes money to the drawer or agrees to pay. Federal courts have held that self-created bills of exchange drawn on the U.S. Treasury are worthless, and presenting them can violate 18 U.S.C. § 514.
What bill of exchange means
Put simply, bill of exchange is part of the working vocabulary of a civil case. The short definition above covers the usual meaning. Still, a specific rule, statute or contract can give it a narrower meaning. For that reason, check how it is used in your own documents.
Where bill of exchange comes up
The term is used across many kinds of cases. For example, you may see it in pleadings, motions and court orders. To see it in context, browse the motions and procedures library or the Learn the Law topics.
Read the source: Negotiable instrument.
How to research the term
First, read the term where it actually appears. A rule, statute or court decision may define it for its own purposes. Next, check whether your court has a local rule that uses bill of exchange in a special way. Then look at recent decisions from courts in your jurisdiction. They show how judges apply the term today. Also, remember that state law can differ from federal law. For that reason, use our state procedures guide to find your state’s rules. Finally, confirm every source is current before you rely on it.
You can read the current federal court rules online for free.
Related legal terms
- Benefit: an advantage, gain or payment. A beneficiary is the person entitled to the benefit of a trust, insurance policy or will. In contract damages, the "benefit of the bargain" is what the injured party would have received if the contract had been performed. Government benefits include payments such as Social Security.
- Beyond a reasonable doubt: the standard of proof in criminal cases. The prosecution must prove every element of the crime to this level, which the Supreme Court held the Due Process Clause requires in In re Winship, 397 U.S. 358 (1970).
- Bid bond: a surety bond submitted with a bid on a construction contract that guarantees the bidder will enter into the contract and provide any required performance and payment bonds if its bid is accepted. Federal Acquisition Regulation rules address bid guarantees on federal construction contracts.
- Bill of attainder: a legislative act that inflicts punishment on named individuals or on easily ascertainable members of a group without a judicial trial (United States v.
Why precise terms matter
Legal words often look like everyday words, but they can carry a precise meaning. Because of that, a small misreading can change how you understand a deadline, a duty or a right. Our glossary keeps each definition short and links it to the procedures where it matters.
Sources
Sources last reviewed: 2026-10-24
Lawtopolis provides legal information and education, not legal advice. Using this site does not create an attorney-client relationship. Laws and court rules vary by jurisdiction and change over time; verify every authority against the official source and consult a licensed attorney in your jurisdiction about your situation.