3Promissorynoteandcheques.ppt

2.3 Promissory note 2.3.1 Definition of a promissory note 2.3.2 Characteristics of a promissory note 2.3.3 Contents of a promissory note 2.3.4 Classification of promissory note 2.3.5 Liabilities of the Parties 2.3.6 The difference between a bill and a note 2.3.1 Definition of a promissory note UK Bills of Exchange Act of 1882, Article 83 A promissory note is an unconditional promise in writing made by one person to another, signed by the maker, engaging to pay on demand or at a fixed or determinable future time a sum certain in money to or to the order of a specified person or to bearer. 2.3.2 Characteristics of a promissory note (1) It is an unconditional promise in writing (2)The basic parties to a promissory note are the maker and the payee (3) There is no need to accept the instrument if it is payable at a fixed or determinable future time (4)Promissory notes can be made by commercial firms or bankers (5) Promissory notes other than those issued by bankers are not very widely used in modern commercial transactions 2.3.3 Contents of a promissory note The word “promissory note” An unconditional promise to pay Status of the payee Signature of the maker Place and date of issue Tenor A sum certain in money Place of payment Promissory Note Promissory Note for GBP8000.00 London,15July,2005 At 60 days after date against this promissory Note, we promise to pay Wenzhou Arts and Crafts Co.,Ltd. or order the sum of EIGHT THOUSAND POUNDS For and on behalf of Citibank,London Branch London John Smith 2.3.4 Classification of Promissory Note According to the tenor Sig