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Promissory Note : The Details

A promissory note is a legal instrument which is a signed document containing a written promise to pay a stated sum to a specified person at a specified date or on demand.

Promissory note is a written promise to pay a debt. It is a financial instrument, in which one party (maker or issuer) promises in writing to pay a determinate sum of money to the other (the payee), either at a fixed, determinable future time or on demand of the payee subject to specific terms.

Thus, a proissory note generally means a signed document containing a written promise to pay a stated sum to a specified person or the bearer at a specified date or on demand. A promissory note can be either payable on demand or ata specific time.

If the promissory note is unconditional and readily saleable, it is called a negotiable instrument.

The terms of a note usually include the principal amount, the interest rate (if any) the parties, date, terms of repayment (which could include interest) and the maturity date.

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