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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