A promissory note is a written unconditional promise by the maker to pay a certain sum of money to the payee or bearer. It must be signed by the maker and include certainty of parties and amount of money. The maker is the person who promises to pay, the payee is the person the note is payable to, and the holder is anyone entitled to possession and payment. Key characteristics include being in writing, containing an express promise to pay, and being definite, unconditional, and for a certain sum of money only. Formalities are not essential for a valid promissory note.

1. SHAMJEED.N
S2 MBA
PROMISSORY NOTE

2. DEFINITION
A promissory note is an instrument in
Writing an unconditional undertaking signed
by the maker to pay a certain sum of
money only to or to the order of a certain
person or to the bearer of the instrument
(Sec.4)

3. EXAMPLE
 I promise to pay a or order Rs.500
 I acknowledge myself to be indebted to a in
Rs.500 to be paid on demand for values
received

4. PARTIES TO A PROMISSORY NOTE
 Maker
The person who makes note promising to pay the amount
stated therein is called the maker of the note.
 Payee
The person to whom the note is payable is called the
payee
 Holder
The holder of a promissory note means any person entitled
in his own name to the possession thereof and to receive or
recover the amount due thereon from parties there to
(Sec.8).

5. CHARECTERISTICS
 In writing
 Promise to pay must be express
 Definite and unconditional
 To be signed by the maker
 Certainty in the case of parties
 Certainty in the case of sum of money
 Promise to pay money only
 Formalities are not essential

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