Question

Kinds of Negotiable Instruments
Which of the following is/are essential(s) of a promissory note?

• A. It must be in writing.
• B. An oral promise to pay will do.
• C. It must contain an oral promise to pay.
• D. All of the above

Answer 1

The correct option is A It must be in writing.

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 order of a certain person, or to the bearer of the instrument.”

The essential elements of promissory notes are:

1. The instrument must be in writing.

2. The instrument must be signed by the maker of it. A signature in pencil or by a rubber stamp of facsimile is good. An illiterate person may use a mark or cross instead of writing out his name. The signature or mark may be placed anywhere on the instrument, not necessarily at the bottom. It may be at the top or at the back of the instrument.

3. The instrument must contain a promise to pay. The promise to pay must be express. It cannot be implied or inferred. A mere acknowledgement of indebtedness is not enough.

4. The payee must be certain.