Definition of Promissory notes

Promissory note is an important Negotiable instrument and has been considered as the Magna Carta in the realm of the debtors and creditors.

Section 4 of the Negotiable instrument act lays down that a promissory note is an instrument in writing (not being a bank note or currency notes) containing an unconditional undertaking signed by the maker, to pay a certain sum of money only to or the order of a certain person, or to the bearer of the instrument.

Illustrations

A sings instrument in the following term :

(a). I promise to pay B or order Rs.500

(b). I acknowledge myself to be indebted to B in Rs.1000 to be paid on demand, for value received.

Essential elements of aPromissory note –

The promissory note must be in writing
Promissory note must contain promise to pay
The promise to pay must be unconditional
The instrument must be signed by the maker.
The maker of the promissory note must be certain person.
The sum payable must be certain.
The sum payable should be in money and money only.
The payee must be certain.

Gyaansanchaar law