Definition of Sight draft:
A bill of exchange which is payable when it is presented.
A bill of exchange is a written order once used primarily in international trade that binds one party to pay a fixed sum of money to another party on demand or at a predetermined date. Bills of exchange are similar to checks and promissory notes—they can be drawn by individuals or banks and are generally transferable by endorsements. These come in two main forms: sight drafts and time drafts.
A sight draft is a type of bill of exchange, in which the exporter holds the title to the transported goods until the importer receives and pays for them. Sight drafts are used with both air shipments and ocean shipments for financing transactions on goods in international trade. Unlike a time draft, which allows for a short-term delay in payment after the importer receives the goods, a sight draft is payable immediately.
How to use Sight draft in a sentence?
- Bruce said he didnt need payment now, but asked for a sight draft from the customer. Therefore, when he presented it, he expected payment for the work completed.
- You should make sure that you bring the sight draft with you so that there is not any misunderstanding when you pay.
- I was glad that it was a sight draft because that meant I could pay it right away, which would be easy.
- Because there is no time delay or waiting period with a sight draft, these usually must be accompanied by an official letter of credit issued by a commercial bank.
- As a type of bill of exchange, sight drafts are utilized in international trade to facilitate short-term financing between importers and exporters.
- A sight draft is a payment document used in international trade whereby a buyer accepts shipped goods and agrees to pay the seller immediately upon delivery.
Meaning of Sight draft & Sight draft Definition