Promissory Note

Section 4 of the Negotiable Instrument Act, 1881 speaks about Promissory Note. Under this section, a Promissory Note means, an instrument in writing, containing an unconditional undertaking signed by the maker to pay a certain sum of money only to or to the order of certain person or to the bearer of the instrument, not being a bank note or currency note.

For example:
(a) I promise to pay B or order Rs. 1000/-
(b) I acknowledge myself to be indebted to X in Rs. 5000/- to be paid on demand for value received.

Salient Features
Must be in writing and signed by the maker.
Must contain an undertaking to make payment.
The undertaking must be unconditional.
Money and Certain sum of money. i.e, the amount payable must be certain.
The payee must be certain. Continue reading “Promissory Note”