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PROMISSORY NOTE

Promissory note is one of the important Negotiable Instrument in India it has been defined in Section 4 of Negotiable Instrument Act 1881 as follows:-

 

" promissory note is an instrument in writing containing an unconditional undertaking (promise) , signed by she makes to pay a certain sum of a certain sum of money only to or the order of a certain person or bearer of the instrument. "

From the definition, there are two parties of a promissory note.

a) Maker - who makes the document promissory note.
b) Payee - who is entitled to receive the money.

A sample of Promissory note is as follows :-

On the basis of above definition following are the features of promissory note.

1) It must be in writing.
2) There must be a promise or under taking to pay a certain sum of money.
3) The promise to make payment must be unconditional.
4) It must be definite about date & time etc.
5) It must be signed by the maker.
6) Parties to the promissory note must be certain the name of the page must be mentioned in it.
7) Sum payble must be certain.
8) promise to pay money and money only.
9) Other formalities also must be fulfilled.


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