Social Sciences and the Law

How is a draft different from a check?

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A draft is similar in form to the ordinary bank check. Often the drawer and the drawee of a draft are the same person. A sight draft is payable immediately on presentation to the drawee; a time draft is payable at a fixed date in the future. A draft is sometimes known as a bill of exchange. It was originally devised to give credit to a customer who intended to pay in the future, but it came to be used to pay foreign debts (see foreign exchange) because it obviated the bother, expense, and risk of transmitting money. Drafts are usually used in commercial transactions in which buyer and seller are distant from each other.

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