What are the essentials of a promissory note?


An instrument to be a promissory note must fulfill the following essentials:-

1. It must be in writing :

A promissory note must always take the form of a written document. Mere verbal promise to pay will not do. The instrument may be written on any paper, on book or any other substitute for paper. The writing may be in pencil or ink. Writing includes printing, photography, and lithography.

2. The promise to pay must be express :

The essential of a promissory note is and express promise to pay. A mere acknowledgment of debt without express promise to pay is not a promissory note. A mere implied promise will not do. The words, “I am bound to pay” or “I am liable to pay” only constitute an acknowledgment of liability to pay and do not amount to an undertaking to pay.

3. The promise to pay must be unconditional :


A promissory note must contain an unconditional promise to pay. The promise to pay must not depend on the happening of a contingency. A conditional promissory note is not negotiable and hence invalid. A promise to pay ‘when able’ or as soon as I possibly can’ is conditional. But the promise to pay does not become conditional if the amount is made payable at a particular place or after a specified time or on the happening of an event which must happen. Thus, a promise to pay Rs. 500 seven days after the death of B is not conditional for it is certain that B will die though the exact time of his death is uncertain. But a written promise to pay a sum of money within so many days after the marriage of the maker was not recognized as a promissory note because the maker may never marry and the sum may never become payable.

4. It must be signed by the maker :

The signature of the maker on the face of the note is the most essential feature. In the absence of the signature of the maker, an instrument cannot be called a promissory note. Signing means writing one’s name on some document or paper. Such signature need not be at the foot or at any particular part of the promissory note, but it must be so placed as to show that the person signing it is the author of the instrument. It may be a thumb-mark, initials or any other mark. Thumb-mark is sufficient when the maker is illiterate, but when he is able to write this mark will not be sufficient.

5. The maker must be certain :

The maker of the note must be definite. The note must show on its face the person who is liable as a maker. He may be described by his name or designation. A promissory note may be made by two or more makers, and they may be liable thereon jointly or severally. Where a person signs in an assumed name, he is liable as a maker. A note signed “A or Else B” is not invalid. It is good against A and B but B becomes liable only on default by A.

6. Promise must be to pay a certain sum :

The amount promised to be paid by the promissory note must be certain and definite. If the amount to be paid is uncertain the instrument will not operate as a promissory note. The promise must be to pay a definite sum and nothing else. Thus, a promise to pay Rs. 2,000 and such other sums as may be due would not make the promissory note valid, because the amount promised is uncertain.


The sum promised to be paid does not become uncertain merely because :-

a) There is a promise to pay the amount with interest at a specified rate ;

b) There is a promise to pay compound interest ;

c) The amount is to be paid at an indicated rate of exchange ;or


d) The amount is payable by installments even with a provision that default being made in payment of an installment, the whole shall become due.

7. The promise should be to pay money and money only :

It is essential that the medium of payment must be money only and not bonds, bills or any other article. Thus, a document containing a promise to pay money and paddy is not a promissory note.

8. The payee must be certain :

It is essential to the validity of a promissory note that the person who is to receive the money should be capable of being ascertained from the instrument itself. Where a document does not specify the person to whom the money is to be paid, it is not a promissory note. The payee should be certain on the face of the instrument and at the time of execution. The payee must be ascertained by name or by designation. A promissory note payable to the secretary of a club, or a manager of a bank or the principal of a college is regarded as payable to a certain person. A promissory note payable to several individuals is not invalid on the ground of uncertainty. Similarly a promissory note payable to either of the two persons specified therein cannot be said to be uncertain.

A bank note or a currency note is not a promissory note as both of them are treated as money itself.

9. Other formalities :


Formalities like number, place, date, attestation, etc., are usually found in the promissory note, but they are not essential to the validity of a promissory note that it should contain the name of the place where it is made or the place where it is payable. Similarly a promissory note under the Indian stamps act and must also be properly cancelled. An unstamped promissory note is not admissible in evidence and no suit can be maintained thereon.

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