Holder: The drawer or the payee who is in possession of the bill is called the holder. The holder must present the bill to the drawee for his acceptance.
Holder in due course: A holder in due course is a holder who obtains a negotiable instrument before maturity, in good faith and for valuable consideration. For example, when a bill is discounted with the banker, the banker is the holder in due course.
Acceptance: The consent given by the drawee to the bill or order drawn by the drawer is called as acceptance of the bill.
Endorsement: The process of transferring the ownership of the instrument by the drawer to another person is known as endorsement. The person to whom the instrument is transferred can get the payment of the instrument from the drawee on the date of maturity.
Maturity of bill: The process of a bill becoming due for payment is known as maturity of bill.
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