DRAFT
A written order by the first party, called the drawer, instructing a second party, called the
drawee (such as a bank), to pay money to a third party, called the payee. An order to pay a sum certain in money, signed by a drawer, payable on demand or at a definite time, to order or bearer.
A tentative, provisional, or preparatory writing out of any document (as a will, contract, lease, and so on) for purposes of discussion and correction, which is afterward to be prepared in its final form.
Compulsory CONSCRIPTION of persons into military service.
Also, a small arbitrary deduction or allowance
made to a merchant or importer, in the case of
goods sold by weight or taxable by weight, to cover
possible loss of weight in handling or from differ-
ences in scales.
A draft that is payable on demand is called a
sight draft because the drawee must comply
with its terms of payment when it is presented,
in his or her sight or presence, by the payee. In
contrast, a time draft is one that is payable only
on the date specified on its face or thereafter.
A draft may be payable to a designated payee
or to the bearer—the person who has possession
of the draft at the time it is presented to the
drawee for payment—pursuant to the drawer’s
directions.
A draft is sometimes synonymous with a bill
of exchange, COMMERCIAL PAPER, or negotiable
