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SS3: COMMERCE - 2ND TERM

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A promissory note is defined as “An unconditional promise in writing made by one person to another, signed by the maker, engaging to pay on demand or at a fixed determinable future date, a sum certain in money or to the order of a specified person to bearer”.

Features of a Promissory Note

  1. It is a promise to pay somebody
  2. It must be in writing
  3. The maker must sign it
  4. It must be an unconditional promise
  5. It can be transferred by endorsing it.

Difference between Bill of Exchange and Promissory Note

1. This is an order to payIt is a promise to pay
2. Bill requires acceptanceAcceptance is not necessary
3. It is drawn by the creditorIt is drawn by the debtor
4. The acceptor is primarily liableDrawer is liable to pay
5. Bills are drawn in setsNotes are made singly
6. There are three parties to a billThere are only two parties

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