Question

Which of the following is a valid promissory note?

• A. I owe A Rs 500
• B. I promise to pay Rs 1,000 ten days after the death of B
• C. I promise to pay the bearer Rs 1,000
• D. I promise to pay Rs 1,000 after the marriage of B.

Answer 1

The correct option is C I promise to pay the bearer Rs 1,000

There are certain essential elements of a promissory note. They are

• It must be in writing - Promissory notes must be in writing. There is no such thing as a "verbal" promissory note for Money. A promissory note is valid only if it is a promise to pay money.
  
• It must be unconditional - The borrower's payment cannot depend on an event or any other possibility. It must be unconditional.
  
• There should be a specific Amount - The note must indicate a specific amount owed that will be paid.
  
• It must contain an express promise - There must be an express undertaking to pay. A mere acknowledgment is not enough
  
• It must be signed - The person who promise to pay must sign the instrument even though it might have been written by the promisor himself.
  
• The payee must be certain - The instrument must point out with certainty the person to whom the promise has been made