Promissory Note

According to the Negotiable Instruments Act, 1881, a promissory note is an instrument in

writing (not being a bank note or a currency note) containing 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. However, under the Reserve Bank of India Act a

promissory note payable to bearer is illegal, so a promissory note cannot be made payable to

the bearer.

In short, when a person gives a written promise to pay a certain sum of money unconditionally

to a certain person or to that person's order, the document is a promissory note.

The features of a promissory note are:

• It must be in writing.
• It must contain an unconditional promise to pay.
• The sum payable must be certain.
• It must be signed by the maker. …