Glossary term
Acceptance
A drawee signing a time draft to confirm it will pay on the due date, turning the draft into a binding promise.
In trade finance, acceptance is the moment a drawee signs a time draft and commits to paying it when it matures. Before acceptance the draft is a demand; after it, it is an obligation, and it can be discounted or traded on that basis.
Acceptance also carries an everyday meaning in carriage: a carrier accepting goods for shipment. The two are unrelated, and a contract using the word without qualifying it is worth clarifying.