Negotiable Instruments Act Section 5 — “Bill of exchange.”
CHAPTER II OF NOTES, BILLSAND CHEQUES
General
Summary
A bill of exchange is a written document containing an unconditional order, signed by the person who makes it, directing a specific person to pay a fixed amount of money to a specific person, to that person's order, or to the bearer. An order to pay is still considered unconditional even if the payment time is tied to an event that is certain to happen, even if the exact date is unknown. The amount can still be considered certain if it includes future interest, is payable at a stated exchange rate, or if the document says the full balance becomes due if an instalment is not paid. The person directed to pay or receive payment can still be considered a certain person even if they are misnamed or described only by a description.
Official Text
A “bill of exchange” is an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of, a certain person or to the bearer of the instrument. A promise or order to pay is not “conditional”, within the meaning of this section and section 4, by reason of the time for payment of the amount or any instalment thereof being expressed to be on the lapse of a certain period after the occurrence of a specified even which, according to the ordinary expectation of mankind, is certain to happen, although the time of its happening may be uncertain. The sum payble may be “certain”, within the meaning of this section and section 4, although it includes future interest or is payable at an indicated rate of exchange, or is according to the course of exchange, and although the instrument provides that, on default of payment of an instalment, the balance unpaid shall become due. The person to whom it is clear that the direction is given or that payment is to be made may be a “certain person”, within the meaning of this section and section 4, although he is mis-named or designated by description only. 1[