What is a Time Draft?
Time drafts are financial drafts that carry a payment date that is set for some specified future point in time. Generally, there are specific circumstances or conditions that must be met in order for the time draft to pay out. Often, the time draft is put in place with the anticipation that certain events will occur between the date that the draft is created and the date that the draft is set for execution. The time draft is different from the common sight draft. With a sight draft, the transaction can take place at any time. All that is required is that the issuer of the draft initiate the transaction. As long as the draft meets the general terms and conditions that apply to any type of transaction conducted by a bank or financial institution, the sight draft will be honored and processed upon presentation. By contrast, the time draft cannot be executed prior to the date specified in the terms of the draft agreement. Furthermore, any provisions included in the text of the draft must b
A time draft is a draft payable on a specified date; or a certain time after date; or a certain time after sight. What is a Letter of Credit? A letter of credit is a letter issued by a banking house to a person who desires to travel abroad. The letter is usually ad-dressed to the foreign correspondents of the bank issuing it, requesting them to furnish the traveller with such funds as he may require, up to the aggregate amount named in the letter. What are Travellers Cheques? Travellers cheques are substitutes for letters of credit and bills of exchange. They are similiar in form to bank bills. They are issued for fixed printed amounts, with the equivalent of each denomination in the money of the principal European countries, and are payable to order, after being signed and countersigned by the purchaser or holder. They are cashed without discount or commission by an extended list of banks and bankers, and are received in settlement of hotel bills by the principal hotels in Europe. Wha
a sight draft? PROBLEMS 1. Draw up a set of laws for the government of your classroom. 2. Suppose J. H. Simpson employed you to work in his office each Saturday during the school year, and agreed to pay you twenty-five cents an hour. Prepare a simple contract for your agreement with Mr. Simpson. 3. You purchase a bicycle from John Smith for $20.00 and give in payment your note due in sixty days. Write the note. Use the current date. 4. You bought from John Williams a bill of goods amounting to $12.50 and gave a check in payment. Is it neces- sary for him to give you a receipt showing that the bill has been paid? 5. R. E. Moore gave’J. H. Dodds his thirty-day promissory note for $100.00. Dodds transferred the note to Elmer Block by indorsement. Write the note with indorsement. Use current date. 6. Price Engle agrees to sell his Hoover automobile to Richard Holme for $650.00. Prepare a sale contract for their agreement. 7. A note dated January 31, 19 , is payable 30 days after date. When
