DRAFT
draft,n.1. An unconditional written order signed by one person (the drawer) directing another
person (the drawee or payor) to pay a certain sum of money on demand or at a definite time to a
third person (the payee) or to bearer. • A check is the most common example of a draft. — Also
termed bill of exchange; letter of exchange. Cf. NOTE(1). [Cases: Banks and Banking 137, 189;
Bills and Notes 1–27. C.J.S. Banks and Banking §§ 328, 330, 452–458; Bills and Notes; Letters
of Credit §§ 2–6, 8–10, 12–22, 203–204, 250.]
bank draft.A draft drawn by one financial institution on another. [Cases: Banks and Banking
189. C.J.S. Banks and Banking §§ 452–458.]
clean draft.A draft with no shipping documents attached.
demand draft.See sight draft.
documentary draft.A payment demand conditioned on the presentation of a document, such
as a document of title, invoice, certificate, or notice of default. [Cases: Banks and Banking
161(1). C.J.S. Banks and Banking §§ 317, 319, 327, 385–386, 388–392, 407, 409–410, 414.]
export draft.A draft drawn by a domestic seller on a foreign buyer, directing the buyer to pay
the trade amount to the seller or the seller’s bank.
foreign draft.A draft drawn in one country or state but payable in another. — Also termed
foreign bill of exchange; international bill of exchange. [Cases: Bills and Notes 13. C.J.S. Bills
and Notes; Letters of Credit § 5.]
inland draft.A draft drawn and payable in the same state or country. [Cases: Bills and Notes
13. C.J.S. Bills and Notes; Letters of Credit § 5.]
overdraft. See OVERDRAFT.
share draft.A demand that a member draws against a credit-union share account, payable to a
third party. • A share draft is similar to a check that is written to draw funds out of a checking
account at a bank. [Cases: Building and Loan Associations 24, 40. C.J.S. Building and Loan
Associations, Savings and Loan Associations, and Credit Unions §§ 4, 11, 18–19, 66–69, 71–79.]
sight draft.A draft that is payable on the bearer’s demand or on proper presentment to the
drawer. — Also termed demand draft. [Cases: Bills and Notes 129(3). C.J.S. Bills and Notes;
Letters of Credit§ 90.]
time draft.A draft that contains a specified payment date. UCC § 3-108. — Also termed time
trade draft.A draft that instructs a commercial enterprise or its agent to pay the amount
2. The compulsory enlistment of persons into military service <his illness disqualified him
from the draft>. — Also termed conscription; military draft. [Cases: Armed Services 20. C.J.S.
Armed Services § 47.] 3. An initial or preliminary version <the second draft of the contract>.
draft,vb.1. To write or compose <to draft a contract>.2. To recruit or select (someone) <to
draft someone to run for political office> <to draft someone into the armed services>. [Blacks Law 8th]