Lesson Progress
0% Complete
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
- It is a promise to pay somebody
- It must be in writing
- The maker must sign it
- It must be an unconditional promise
- It can be transferred by endorsing it.
Difference between Bill of Exchange and Promissory Note
| 1. This is an order to pay | It is a promise to pay |
| 2. Bill requires acceptance | Acceptance is not necessary |
| 3. It is drawn by the creditor | It is drawn by the debtor |
| 4. The acceptor is primarily liable | Drawer is liable to pay |
| 5. Bills are drawn in sets | Notes are made singly |
| 6. There are three parties to a bill | There are only two parties |
Responses