Definition

Noun: 1. The party ordered to pay a negotiable instrument: The drawee is the individual or institution (most commonly a bank) upon whom a bill of exchange, check, or draft is drawn, and who is expected to make payment when the instrument is properly presented.

Usage

• The drawee is a central figure in financial transactions involving checks and drafts. The entity issuing the instrument (the drawer) orders the drawee to pay a specified sum to a third party (the payee).
• The drawee's obligation to pay is conditional upon the instrument being valid and presented correctly, and upon the drawer having sufficient funds or credit with the drawee.

Examples

Advanced Usage

• "Drawee bank": This is a very common specific usage, referring to the bank upon which a check is drawn and which holds the payer's account.
  • The payee must present the check to the drawee bank for payment or deposit.

Variants and Related Words

• Drawer (noun): The party that writes and issues a check or draft, ordering the drawee to pay.
• Payee (noun): The party to whom payment is ordered to be made.
• Acceptor (noun): A drawee who has signed a bill of exchange, thereby accepting the obligation to pay it.

Synonyms

• Payer: (In this specific financial context) The one who is to make the payment.
• Payor: An alternative spelling of 'payer'.

Related Terms and Phrases

• "Presented for payment": The act of submitting a financial instrument to the drawee to demand the owed funds.
  • Upon being presented for payment, the drawee must either pay or dishonor the check.
• "Dishonor a draft": The act of the drawee refusing to pay a properly presented instrument.
  • The bank, as the drawee, had to dishonor the draft because the signature was forged.

Noun

1. the person (or bank) who is expected to pay a check or draft when it is presented for payment