A financial instrument that contains a written promise by
one party to pay another party a definite sum of money either on demand or at a
specified future date. A promissory note typically contains all the terms
pertaining to the indebtedness by the issuer or maker to the note's payee, such
as the amount, interest rate, maturity date, date and place of issuance, and
issuer's signature. The 1930 international convention that governs promissory
notes and bills of exchange also stipulates that the term “promissory note”
should be inserted in the body of the instrument and should contain an
unconditional promise to pay.
OR
A promissory note is a legal instrument (more particularly,
a financial instrument), in which one party (the maker or issuer) promises in
writing to pay a determinate sum of money to the other (the payee), either at a
fixed or determinable future time or on demand of the payee, under specific
terms. If the promissory note is unconditional and readily salable, it is
called a negotiable instrument.
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