Business Glossary

instrument normally used in international commerce to effect payment; also calledbill of exchange. It is simply an order written by an exporter (seller) requesting an importer (buyer) or its agent to pay a specified amount of money at a specified time. The person or business initiating the draft is known as themaker, drawer, ororiginator, The party to whom the draft is addressed is thedrawee

signed, written order by which one party (drawer) instructs another party (drawee) to pay a specified sum to a third party (payee). Payee and drawer are usually the same person. In foreign transactions, a draft is usually called a bill of exchange. When prepared without supporting papers, it is a clean draft. With papers or documents attached, it is a documentary draft. A sight draft is payable on demand. A time draft is payable either on a definite date or at a fixed time after sight or demand.

payment order in writing directing a second party, the drawee , to pay a specified sum to a third party (the payee). A draft is actually a bill of exchange, although the term draft is ordinarily used if drawn on a bank. A check is a bank draft payable when presented (a sight draft ). Drafts may also be payable at a future date (a time draft ).

1. order in writing, directing a person other than the maker specified sum to a named person. Drafts may or may not be negotiable instruments . depending on whether the elements of negotiability are satisfied. Draft is synonymous with bill of exchange .
2. preliminary form of a legal document; for example, the draft of a contract, often called rough draft.
3. process of preparing, or drawing, a legal document, such as a will or a piece of proposed legislation.
4. in a military context, conscription of citizens into the military service.