Commercial draft

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Commercial draft

Demand for payment.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Commercial Draft

A request or demand for payment made by a bank on behalf of a third party. While the recipient of the commercial draft is not bound to honor it, refusal to do so may hurt his/her credit at the bank issuing the demand. For example, if Fred owes Joe money, Joe may ask a bank to issue a commercial draft, which Joe or a courier presents to Fred. Fred is not legally obliged to pay Joe, but if he does not, he may find difficulty securing a loan from the bank and other banks associated with it.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
The Commercial Cooperation Committee talks on Wednesday discussed the operation of several joint commercial drafts in preparation for their adoption as mandatory across all of the six states like the anti-commercial fraud law, and an auditing law.
The first section of Chapter 2 (Drafts) addresses the drawing of drafts.(62) Article 19 states that "[a] draft is a bill signed by the drawer, requiring the entrusted payer to make unconditional payment in the fixed amount at the sight of the bill or at a fixed date to the payee or the holder."(63) The statute applies to bank drafts as well as commercial drafts.(64) Drafts, and in particular bank drafts, are important payment mechanisms in China today.(65) A draft is considered drawn when the drawer signs and delivers it to the payee.(66)
instruments such as banking drafts, commercial drafts, cashier's checks and

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