Drawer Definition and Legal Meaning
On this page, you'll find the legal definition and meaning of Drawer, written in plain English, along with examples of how it is used.
What is Drawer?
n. The party who endorses a bill of exchange.
History and Meaning of Drawer
The term "Drawer" in legal context refers to a contractual relationship between the parties involved in a bill of exchange. It is the party who writes or creates the bill of exchange and who directs the drawee to pay the specified sum of money to the payee. The Drawer is also responsible for endorsing the bill and ensuring its acceptance.
The history of the term dates back to the 18th century when bills of exchange were used as a means of payment for international trade. The Drawer played a significant role in making sure that the payment was securely and promptly made. Over time, the term has been extended to other payment instruments such as cheques and promissory notes.
Examples of Drawer
- When John writes a cheque to Mary for $1000, John is the Drawer.
- A promissory note is issued by a borrower (drawer) to a lender. The drawer promises to pay the lender a specified amount on a certain date or upon request.
- When an exporter creates a bill of exchange to be paid by an importer, the exporter is the Drawer.
Legal Terms Similar to Drawer
- Drawee: The person who is directed to pay a specified sum of money by the drawer.
- Payee: The person who is entitled to receive payment.
- Endorser: The person who transfers property rights to a financial instrument to another person.