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CHAPTER 4.2 DEFINITIONS OF PROMISSORY NOTE, CHEQUE & BILL OF EXCHANGE 䖾 Quick Revision of the chapter PROMISSORY NOTE: (SECTION 4)
A Promissory note is an instrument in writing (not being a bank note or a curre cy note) containing an unconditional undertaking, signed by the maker, to pay certain sum of money only to, or to the order of, a certain person, or to the bear of the instrument. Parties:
Maker: The person who makes the promissory note and promises to pay called the maker.
Payee: The person to whom the payment is to be made is called the payee.
Requisites of a Promissory Note:
The promissory note must be in writing.
It must contain an undertaking to pay. There must be an express promise pay.
The promise to pay should be unconditional.
The promissory note must be signed by the maker.
The sum payable must be certain.
The instrument must contain a promise to pay money and money only.