Drawer vs. Drawee – Which is Correct?

In financial terminology, the terms “drawer” and “drawee” refer to specific roles involved in the process of issuing and processing payment instruments like checks. Understanding the distinctions between these two terms is crucial for anyone dealing with financial documents and transactions.

Drawer vs Drawee – Which is Correct?

Both terms, “drawer” and “drawee,” are correct but refer to different parties in a financial transaction. The drawer is the person or entity that creates the payment order, such as a check, while the drawee is the financial institution or party that is instructed to pay the amount specified in the payment order.

Word	When to Use	Example
Drawer	Use when referring to the party that issues the payment document.	John is the drawer on this check.
Drawee	Use when referring to the bank or institution that pays the specified amount.	The drawee is responsible for clearing the check.

How to Use Drawer

To use “drawer” correctly, refer to the individual or entity who writes or issues the payment order. This term is primarily used in banking and financial contexts.

Example 1: The drawer of a check must have sufficient funds in their account.

Example 2: In this transaction, Sarah acted as the drawer when she issued the promissory note.

Example 3: The drawer’s signature is necessary for the check to be valid.

What are the different forms of Drawer?

“Drawer” is a noun and does not have verb forms. It remains the same regardless of tense or number, although “drawers” can be used in plural form to refer to multiple drawers.

Etymology of the word Drawer

The term “drawer” comes from the Old French word “druer,” which means to draw or pull. In financial terminology, it refers to someone who draws a document or order for payment.

How to Use Drawee

To use “drawee” correctly, refer to the bank or institution that is obliged to honor the payment made by the drawer. It is often found in legal and banking documentation.

Example 1: The drawee must examine the check for authenticity.

Example 2: When the drawee receives the payment order, they will process it immediately.

Example 3: If the drawee refuses to pay the check, it may be subject to legal action.

What are the different forms of Drawee?

“Drawee” is also a noun, and its plural form is “drawees,” which indicates multiple entities that may be responsible for paying a payment order.

Etymology of the word Drawee

Practice Exercises

1. The _____ must verify that there are sufficient funds before processing the check.
2. The _____ signed the loan agreement to initiate the payment.
3. The _____ is authorized to endorse the document for payment.
4. Before submission, ensure that the _____ has provided their signature.
5. In this case, the _____ is responsible for transferring the funds when the check is presented.

Answer Key

1. Drawee
2. Drawer
3. Drawee
4. Drawer
5. Drawee

Drawer Synonyms

Synonym	Definition
Signer	A person who signs a document.
Issuer	An individual who provides or issues a document.

Drawee Synonyms

Synonym	Definition
Payee	The person or entity that is to receive payment.
Financial institution	A bank or organization that provides monetary services.

Conclusion

In summary, understanding the roles of the drawer and drawee is essential for anyone involved in financial transactions. The drawer initiates the payment, while the drawee is the financial entity that processes it. Knowledge of these terms enhances clarity and efficiency in financial dealings.