Promissory Note

Definition

Promissory Note. A promissory note is a written, signed, unconditional, and unsecured promise by one party (the maker or promisor) to another (the payee or promisee) that commits the maker to pay a specified sum on demand, or on a fixed or a determinable date.

It is an unconditional written promise, issued and signed by the debtor, to pay on demand or at a fixed or determinable future date an agreed amount of money to the order of a specified person or to the note's bearer.

Promissory notes (such as bank or currency notes) are negotiable instruments. Promissory notes are transferred by endorsement.

Issues and Challenges

Unlike a contract, a Promissory Note does not need to be signed by both parties. It is essentiually a promise from one party to the holder, of some good or benefit. Promissory notes would generally by fully fungible. These are modeled as a kind of contract but are essentially a kind of unilateral contract between the issuer and the holder, and some authorities might not see this as a contract at all. Cash is a kind of promissory note, with the issuer being a central bank.

See Also

• http://www.businessdictionary.com/definition/promissory-note.html

Disclaimer

This entry annotates a FIBO Ontology Class. FIBO is a trademark and the FIBO Ontology is copyright of the EDM Council, released under the MIT Open Source License. There is no guarantee that the content of this page will remain aligned with, or correctly interprets, the concepts covered by the FIBO ontology.