Promissory Note meaning and its essentials
(1) Promissory Note (Section 4) Section 4 of the Act defines promissory note as, "A promissory note is 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, a certain person, or to the bearer of the instrument." Essentials of a Promissory Note- (1) Promissory Note is a Negotiable Instrument- A promissory note is freely transferable i.e. negotiable therefore is called as a negotiable instrument. A promissory note is freely transferable any number of times before its due date. In other words, it must satisfy all the essentials of a negotiable instrument. (2) In writing Every negotiable instrument has to be in writing. That is, therefore, it is one of the essential requirements of a promissory note according to Section 4. An oral promise to pay does not become a promissory note. No particular form is prescribed, a promise contained in a letter will suffice. Writing includes printing or...