Bill of exchange holders and valuable consideration

A bill of exchange is a document that belongs to the category of securities and is a means of securing credit and servicing transactions. The only signature required for its validity is that of the principal. If the issuer’s signature is not there, then the document cannot be a bill of exchange, nor does it create liability for the person who may have signed it as a guarantor.

The issuer’s signature is essential for the validity of a bill of exchange and without it no action can be brought against the recipient or issuer thereof.