Promissory Notes
A promissory note is a written promise made by one person to another undertaking to pay him or his order a slated sum of money on a fixed or determinable future date. A note differs from a bill in the following respects:-
- It is made by a debtor to the creditor while a bill is made by creditor to a debtor.
- A note is a promise to pay, while a bill is a demand for payment.
- A bill requires acceptance while a note does not. A promise is made, a bill is drawn.
The parties of the note are:
- The marker as opposed to the drawer of a bill
- The promise as opposed to the drawee and the payee.
Thus there are three panics to the note and four to the bill.
Example of a promissory note.
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P.O. Box 968, Jinja, Uganda, 31st December, 2006. Shs. 20,000,000/= Three months after this date I promise to pay Oluka or his order twenty million shillings for value received. To Oluka Muduku |