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Parties to a Promissory Note

There are two parties to a promissory note.
  • Maker or Drawer is the person who makes or draws the promissory note. He is also called the promisor.
  • Drawee or Payee is the person in whose favour the promissory note is drawn. He is called the promisee.
A promissory note does not require any acceptance because the maker himself promises to make payment otherwise mentioned.The above specimen copy of promissory note (refer figure 8.2), depict it.

Ashok Kumar is the drawer or maker who promises to pay Rs.30, 000 and Harish Chander is the drawee or payee to whom payment is to be made. If Harish Chander endorses this promissory note in favour of Rohit then Rohit will become the payee. Similarly, if Harish Chander gets this promissory note discounted from the bank then the bank will become the payee.

Distinction between a bill of exchange and Promissory Note
Even though the bill of exchange and a promissory note are instruments of credit and are similar in many ways. There are certain basic differences between the two.

They are:




Bill of Exchange

Promissory Note



It is drawn by the creditor

It is drawn by the debtor.



It contains an order to make payment to it. There can be three parties. viz, drawer, the drawee and the payee

It contains a promise to make payment. There are only two parties to it, viz. the drawer and the payee.



It requires acceptance by the drawee or someone else on his behalf.

It does not require any acceptance.



Drawer and payee can be the same party.

Drawer cannot be the payee of it.



In case of its dishonor due notice of it is to be given by the holder to the drawer.

No notice needs to be given in case of its dishonor.

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