Bills of Exchange in Florida
A bill of exchange is a negotiable instrument containing an unconditional written order from one party directing another to pay a specified sum. In Florida, bills of exchange are governed by UCC Article 3 (Chapter 673).
Types and Uses
The most common bill of exchange is a check, a demand instrument drawn on a bank. Trade drafts are used in Florida commercial and international transactions, allowing sellers to extend credit while holding a negotiable instrument. Sight drafts require immediate payment upon presentation; time drafts specify a future payment date, facilitating trade finance.
Negotiability
A Florida bill of exchange that meets UCC Article 3 requirements is negotiable, meaning it can be transferred to third parties who may become holders in due course with enhanced rights. This negotiability gives bills of exchange their commercial utility, allowing them to circulate as near-substitutes for cash in business transactions.
Related Terms
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Reviewed by the attorneys at Barnes Walker, Goethe, Shea & Robinson, PLLC