Accommodation Bill
An accommodation bill is signed by a party that lends its credit to another party without directly receiving the value given for the bill.
Learn how promissory notes, accommodation bills, and order paper create and transfer payment obligations.
Bills and notes are written payment instruments, but they do not create the same obligation. A promissory note contains the maker’s promise to pay. A bill of exchange contains the drawer’s order directing a drawee to pay. The distinction determines which party must act, whose acceptance matters, and how the payment claim may be enforced.
| Guide | Use it to answer |
|---|---|
| Promissory Note | What did the maker promise, when is payment due, and is the note secured or negotiable? |
| Accommodation Bill | Who signed to lend credit to another party, in what capacity, and with what liability? |
| Order Paper | Is the instrument payable to a named person or that person’s order, and what endorsement is needed? |
| Bill of Exchange | Who issued the payment order, did the drawee accept it, and when must it be presented? |
| Feature | Promissory note | Bill of exchange |
|---|---|---|
| Payment language | Maker promises to pay | Drawer orders drawee to pay |
| Core parties | Maker and payee | Drawer, drawee, and payee |
| Acceptance | The maker’s signed promise creates the stated undertaking | Drawee generally must accept before becoming the acceptor |
| Supporting signature | An accommodation party may support a note under applicable law | An accommodation drawer, acceptor, or endorser may lend credit to a bill |
| Timing | Demand, fixed date, or determinable future time | Sight, demand, fixed date, after date, or after sight under applicable rules |
Use Negotiability, Endorsement, and Transfer for holder, endorsement, delivery, and transfer analysis. This material is general financial education, not legal, lending, accounting, tax, or investment advice.
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An accommodation bill is signed by a party that lends its credit to another party without directly receiving the value given for the bill.
Order paper is a negotiable instrument payable to a named person or that person's order.
A promissory note is a signed written promise by a maker to pay a specified sum on demand or at a defined future time.