terms of a note typically include the principal
amount, the interest rate if any, and the maturity
date. Sometimes there will be provisions concerning
the payee's rights in the event of a default, which
may include foreclosure of the maker's assets. Demand
promissory notes are notes that do not carry a specific
maturity date, but are due on demand of the lender.
Usually the lender will only give the borrower a
few days notice before the payment is due.
loans between individuals, writing and signing a
promissory note is often considered a good idea
for tax and record keeping reasons. A promissory
note differs from an IOU in that the latter is a
simple acknowledgement of the existence of a debt
owed, whereas a promissory note, as its name implies,
contains an affirmative undertaking to pay the amount
the United States, a promissory note that meets
certain conditions is a negotiable instrument governed
by Article 3 of the Uniform Commercial Code. Negotiable
promissory notes are used extensively in combination
with mortgages in the financing of real estate transactions.
Other uses of promissory notes include the capitalization
of corporate finances through the issuance and transfer
of commercial paper.
various times in history, promissory notes have
acted as a form of privately issued currency. In
many jurisdictions today, bearer negotiable promissory
notes are illegal precisely because they can act
as an alternative currency. All Scottish banknotes
are effectively standardized demand promissory notes.
web site is designed to give you general information.
The information on this web site is in no way intended
to be legal advice. Legal advice can only be obtained
by a licensed attorney who has the appropriate legal
skills and knowledge related to your specific circumstances.