What is promissory note? Features and parties involved in a promissory note

Promissory note

Section 4 of the Indian Negotiable Instrument Act of 1881 defines  "A promissory note is an instrument in writing, containing an unconditional undertaking, sign by the maker, to pay a certain sum of money to or to the order of a certain person or to the bearer of the Instruments"

Features of a promissory note

The main Characteristics of a promissory note are:-

1. It must be in writing.
2. It must contain an Express undertaking or promise to pay.
3. The promise to pay must be unconditional i,e. no condition should be attached to the promise.
4. The maker must be certain i.e. the name of the person who promises to pay must be clearly stated in the promissory note.
5. It must be sign by the maker.
6. The promise must be to pay only the money, and not any other things.
7. The amount payable must be certain i.e fixed.
8. The payee must be certain i.e. the name of the person to whom the payment is to be made must be mentioned in the promissory note.
9. It must bear the required revenue stamps.

Parties to a promissory note

The parties to a promissory note are:

(1) Maker or promisor : The maker or promisor is the person who makes the promissory note i.e. who promises to pay the amount.

(2) Payee or Promises :  The payee or the promises is the person in whose favour in the promissory note is made i.e. the person to whom the amount of promissory note is payable