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