November 22, 2009

The Documentary Draft is prepared by the beneficiary and submitted to the paying bank in conjunction with the required documents for negotiation and payment.
Definition of a Documentary Draft
A draft is an unconditional order, in writing, signed by a seller and addressed to a buyer or bank ordering him to pay the amount specified on the draft on presentation or at some future date. The documentary draft has documents attached which evidence performance. They convey title or possession in return for immediate payment, or an acceptance of the obligation to pay at a later date.
Purpose of a Documentary Draft
The documentary draft is a formal and binding acknowledgement of an outstanding debt obligation with a promised due date. The seller completes and presents the draft to the buyer or the buyer's bank for payment for goods shipped. The seller who makes out the draft, signs it, and thus demands, payment is the "drawer". The party to who payment is effected is the "payee". Drawer and payee may be one and the same. A drawer may also present a draft payable to a third party, usually the bank with whom the drawer maintains an account, which is named as payee. The person on whom the draft is drawn is "drawee".
Process for a Documentary Draft
The Documentary Draft is prepared by the Beneficiary.
The Documentary Draft is included in the negotiable document set.
Fields for a Documentary Draft
USD $
DATE
PAY TO THE ORDER OF
TO
COMPANY
BY
NO