Definition
The term ‘after date’ in a bill of exchange refers to a specific instruction regarding the commencement of the payment period. It is used to denote that the payment obligation under the bill becomes due a certain number of days (or months) post the date mentioned on the document. For example, if a bill states “30 days after date,” the payee will be entitled to receive payment 30 days after the date written on the bill.
Context and Usage
The usage of ‘after date’ is crucial in trading and financing as it sets clear, unambiguous timelines for financial obligations. This is particularly important in international trade, where different banking practices and time zones can complicate transaction timings.
Key Comparisons
- After Sight: Unlike ‘after date,’ ‘after sight’ requires that the payment period begins only once the bill is presented or sighted by the payer or drawee.
- At Sight: ‘At sight’ denotes that payment is due immediately upon presentation of the bill to the drawee.
Understanding these differences is fundamental for anyone involved in the drafting, issuing, or paying bills of exchange.
Related Terms
- Bill of Exchange: A written order from one party (the drawer) to another (the drawee) to pay a specified sum to a third party (the payee) on demand or at a fixed future date.
- Drawee: The party on whom the bill of exchange is drawn and who is responsible for paying the amount on it.
- Drawer: The entity that issues a bill of exchange, instructing the drawee to pay a third party.
- Payee: The recipient of the funds as stipulated in the bill of exchange.
Further Reading
For those looking to deepen their understanding of bills of exchange and other financial instruments, the following books are highly recommended:
- “Principles of Payment Systems” by James White and Robert Summers
- “The Law of Bills of Exchange, Promissory Notes, and Guarantees” by Sir John Barnard Byles
- “Modern Banking Law” by Ellinger and Lomnicka
Loaded with sharp insight and unpayable advice, this guide should be your first investment in the risky business of understanding bills of exchange. Remember, knowledge pays the best interest, so start accruing that interest today!
