Coupon Accepted Successfully!


Promissory Note

A promissory note is 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 order of a certain person. A promissory note cannot be made payable to bearer.

This also is a negotiable instrument.

Parties to a Promissory Note

There are two parties to a promissory note.


(i) The maker, i.e., the person who gives the promissory note. He is the promisor who promises to pay.

(ii) The payee, i.e., the person on whose order the note is mad payable.

Essential Features of a Promissory Note

(a) It must be in writing.

(b) It must contain a clear promise to pay. If a debt is merely acknowledged, it is not a promise.

(c) The promise to pay must be unconditional. “I promise to pay Rs.10,000 as soon as possible” is not an unconditional promise.

(d) It should be properly stamped.

(e) It should not be made payable to bearer.

(f) The sum payable must be certain.


(g) The maker must be a specific person.

(h) It should be signed by the promisor or maker.

(i) The payee must be certain.

Test Your Skills Now!
Take a Quiz now
Reviewer Name