Promissory Note - Concept, Meaning and Essential Requirements

Promissory Note - Concept, Meaning and Essential Requirements

Promissory Notes: 

Promissory Note is a written, dated and signed two-party instrument containing an unconditional promise by the maker to pay a definite sum of money to a payee on demand or at a specified future date.

Essentials of Promissory Note

Promissory notes must expressly fulfill the following essential requirements:

1. The expressions "to the order" or "promissory note" in the note’s language.

2. The unconditional promise to pay the designated certain amount;

3. The maturity date;

4. The place of payment;

5. The name of the person to whom or to whose order payment must be performed;

6. The date and place of issuance of the promissory note;

7. The issuer’s signature.

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