Promissory Note


A promissory note is an instrument in writing (not being a banknote 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. The person who promises to pay is called the maker. The person who is promised the payment is called the payee.

Essentials elements of a promissory note:

Writing: The promissory note must be in writing. Oral engagement or promise is excluded. No particular form of words is necessary. It may be written in ink or pencil or may even be printed or cyclostyled. It may be in any form but the words shall be visible. Intention to make a note must be clear.

Undertaking to pay: It is not necessary to use the word “promise” but the intention must clearly show an unconditional undertaking to pay the amount. Absence of the word ‘promise’ does not mean that a document is not a promissory note, provided it fulfils the requirements of this section and there is clear intention on the part of the parties to treat the document as a promissory note.


1) I acknowledge to pay on demand Rs 1000 for value received. This is a promissory note. But – I acknowledge receipt of Rs 1,000 is not a promissory note.
2) I promise to pay B Rs 1000 on demand, It is a promissory note
3) I promise to pay B or order Rs 1000 is a promissory note.
4) I owe you Rs 1000. This is not a promissory note
5) I acknowledge myself to be indebted to B in Rs 1,000 to be paid on demand, for value received is a promissory note.
6) Mr B, IOU Rs 1000 is not a promissory note.
7) Received from X Rs 1000 which I promise to pay on demand with interest is a valid promissory note.

A document which is a receipt for money paid by cheque and which incidentally contains a promise to repay the amount is not a promissory note as there is no intention of creating a negotiable instrument at all.

Unconditional: It must contain definite and an unconditional undertaking to pay. Promise to pay should be unconditional. A conditional instrument is invalid. It must be certain of payment.


Conditional promissory notes:

1) I promise to pay B Rs 1,000 7 days after C ‘s marriage
2) I promise to pay B Rs 1,000 after deducting a sum due to him.
3) We promise to pay £ 116.11s on D’s death, provided D leaves us enough to pay that sum.

Now these writings are conditional. Payment is subject to a certain event happening. Such writings are not promissory notes.

Conditional notes are invalid because it is not certain whether or not they will ever be paid.

Unconditional promissory notes:

The following promises, however, are not conditional

1) At a particular place or at a specified time.
2) A promise dependant on the happening of an event which must happen, though the time of its happening may be uncertain. Death is a certain event. Promissory note, therefore, drawn payable after death of a certain person is a valid note.
3) A promise given for an executed consideration.
4) Any promise to pay an instrument on lapse of certain period, after a specified event which is certain to happen.

Valid conditional promissory notes:

1) I promise to pay B Rs 500 three days after the death of X. This is valid promissory note as death is a certain event to happen; though time of death is uncertain.
2) I promise to pay B Rs 500 at Bombay.
3) I promise to pay B Rs 500 on 31st December 1977

The writings are promissory notes, though conditional as regards place and time of payment, respectively.

Signed: The instrument must be signed by the maker thereof. The sign or a mark would constitute signature, if the maker intended to subscribe to the document. Person must sign with his free consent. It should not only be a physical act but also a mental act with an intention to sign.

Certain persons: The maker and payee of the instrument must be certain and definite persons. A note may be made by several persons jointly to bind themselves jointly or severally. A promissory note cannot be made by two persons payable by either in the alternative.

Two distinct persons should fill in the role of a maker and payee. A note cannot be made payable to the maker himself. However, if the maker endorses the note, it is then valid. A note may be made payable to two or more persons jointly. Payee must be a certain person. If he is capable of being ascertained where he is misnamed or wrongly described, he will be a certain person.

For example – a promissory note payable to my only niece living England is a valid promissory note.

  • robert john galbraith

    gave my son £25000 to helped with his debt problem with him not paying the sum back to he therefore indebted to me on certain circumstances?

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