Though bill of exchange and promissory notes are negotiable instruments (an unconditional order or promise to pay a certain amount of money) but there are some differences between bill of exchange and promissory note, lets look some of them –
1. Under bill of exchange there are three parties’ that is drawer, drawee and payee, while in case of Promissory note there are only two parties to the contract, one is called maker, other is called payee.
2. In case of bill of exchange the liability of drawer is secondary and that of drawee it is primary but in case of promissory notes liability of a maker of promissory note is primary.
3. In case of bill of exchange both drawer and payee may be the same person (since drawee can order payee to pay himself thus making him payee also) while as far as promissory notes are concerned maker and payee must be different persons.
4. Bill of exchange (which is payable after sight) can be presented for payment only when it is accepted by drawee, while there is no need of acceptance of maker while presenting promissory note for payment.