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October 28, 2016

Promissory Note in Business Law | Definition & Essentials

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 on demand or at a fixed or determinable future time a certain sum of money only to, or to the order of, a certain person, or to the bearer of the instrument.

Parties to Promissory Note

  • Maker i.e. debor
  • Payee i.e. creditor

Essentials of promissory Note

  • It must be in writing
  • The promise to pay must be unconditional
  • It must be signed by maker
  • The maker must be certain person
  • The payee must be certain
  • The sum payable must be certain
  • The sum payable must be in Pak rupees

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