PROMISSORY NOTE

PROMISSORY NOTE
The promissory note is one of the simplest forms of the credit instrument. Section 4 of the Act defines a Promissory Note as an instrument in writing not being bank note or a currency note containing an unconditional undertaking signed by the maker to pay a certain sum of money only to or to the orders of a certain person to the bearer of the instrument.
Characteristics of a Promissory Note
The essential characteristics of a promissory note are as follows
i. It is a written document signed as follows.
ii. It contains an unconditional promise to pay.
iii. Besides an acknowledgement a promissory note is an express promise to pay.
iv. Promissory note must always relate to a definite and certain amount of legal money of the country and not to foreign money.
v. It should not be a bank note or currency note.
vi. No particular from is prescribed for it.
vii. A promissory note is not payable to the bearer on demand.
viii. The person to whom the promise is made must be definite person.