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What Does “Drawee” Mean?

There are instances when a third party may be involved in the payment of a check by the act of disbursing the payment. For example, a person may make use of a check to pay another person. However, a third party in the form of a bank is involved. The bank plays a role in providing the paid person with the money upon the presentation of the check. The bank, in this instance, is called a drawee, while the person who writes the check is the drawer and the person who receives the check is called a payee.

Drawees can be in different persons or entities other than banks, as long as the purpose of the drawee is to “draw” out funds for the purpose of payment. It is the duty of the drawee to disburse payment upon presentation of proof by the payee from the drawer. This proof can be in the form of a check, note, or any bills of exchange. The drawee has the right to examine the bill of exchange in order to determine its validity. The drawee reserves the right to refuse a bill of exchange if it is proven to be invalid.

Other persons or entities can take on the role of a drawee. For example, a person who writes an I.O.U. note is considered his or her own drawee since he or she will disburse the payment at a later date. However, under no circumstances can a person or entity be forced to become a drawee.

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