A drawee is someone who is required to pay a bill when presented by the payee. The classic example is a check, with the bank being the drawee. Bills of exchange are not limited to checks and drawees have the right to examine the document before paying. A drawee cannot be forced and people cannot be held liable for debts they did not incur. “Cash” checks can be used to limit access to bank accounts.
A drawee is a natural or legal person who is required to pay a bill when it is presented by the payee. The person who writes such a document is said to be the designer or creator. The classic example of a bill of exchange is a check. The person writing the check is the drawer, the person to whom the check is payable is the payee, and the bank named on the check is the drawee. The payee can walk into the bank, present the check, and request the funds indicated on the check.
Banks are not the only entities that may be covered, although they are among the most common. A person may also be his or her drawee, such as when someone writes an IOU to a friend indicating that when the note is presented, he or she will repay the debt. Bills of exchange, also known as drafts, are also not necessarily limited to checks.
When a bill of exchange is presented to a drawee, the drawee has the right to examine it to confirm its authenticity. If the document does not appear authentic or is not filled out correctly, the drawee may refuse to honor it, in which case the payee will have to go back to the drawer to obtain the funds. Likewise, drawees do not extend credit without prior agreement and may return a draft without paying because the drawer does not have sufficient funds to pay it or is not authorized to write the draft.
You cannot make a drawee against his will. For example, Jack can’t write a draft naming Jane as drawee unless they have a previously agreed upon legal agreement that allows people to raise money from Jane. Likewise, people also cannot be held liable for debts they do not incur.
People who need access to cash in a bank account may choose to issue a “cash” check, with the bank paying the presenter the check. This tactic is sometimes used by people like parents who don’t want their children to have full access to a bank account, but want to allow their children to withdraw cash in a specific situation. Similarly, an entrepreneur who cannot leave the business can send an employee to get cash from the bank with a cashier’s check.
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