Definition: The Bill of Exchange Act 1882 defines promissory note as an “unconditional promise in writing made by one person to another, signed by the maker, engaging to pay, on demand or at a fixed or determinable future time, a sum certain in money to or to the order of a specified person, or to bearer.
Once signed by the maker, it must be handed over to the payee.
A promissory note is an unconditional promise by the borrower to return the borrowed money on a specified date to the lender or his order.
Essentials: Following essential make and keep the promissory note or pronote valid:
- It must be writing.
- It must be a promise.
- The note is always unconditional.
- Promise contains the return of the borrowed money.
- It is payable on demand or on a specified period / date.
- The maker must sign it.
- The promise must bear a revenue stamp.
- The maker must be a certain person.
Payee must be a certain person.