Essentials of a Valid Promissory Note

Essentials of a Valid Promissory Note

As per Negotiable Instruments Act 1881 Section 4 defines Promissory Note as : 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 the order of, a certain person, or to the bearer of the instrument.

A Template of Promissory Note given below

Promissory Note Template
Promissory Note Template

Essentials of a Valid Promissory Note are

  • It must be in Writing
  • It must Contain an undertaking to pay
  • It must be signed by the maker
  • Undertaking must be unconditional
  • Maker of note must be certain
  • Sum payable must be certain
  • Promise should be to pay money only
  • Payee must be certain

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