Characteristics of a Promissory Note . A promissory note must be in writing. An oral promise to pay does not constitute a promissory note. .
It must contain a promise or undertaking to pay a mere acknowledgement of indebtedness will not make it a promissory note. . The promise to pay must be unconditional. In other words, the promise to pay must not depend upon the happening of any uncertain event.
. It must be signed by the maker. The signature must be in any part of the instrument and it need not be at the bottom. .
The maker of the note must be a certain person. Where there are two or more makers, they may bind themselves jointly or jointly and severability. But alternative promissors are not permitted in law because where liability lies no ambiguity must lie. .
The payee must be certain. A note is valid even if the payee is misnamed or indicated by his official designation only. Alternative payees are permissible in law. But is must be made payable to order originally.
. A promissory note originally made payable to bearer is illegal. . The promise must be for payment of money only.
For eg. a note containing a promise to deliver bags of rice is not a promissory note. . The sum payable must be certain and must be specified in the note itself.
. The amount payable must be in legal tender money of India and a note containing a promise to pay a certain amount of foreign money is not a promissory note. . A bank note or a currency note is not a promissory note.
. A promissory note must be sufficiently stamped. / August , Micheal Lawrence President Allimuthu and Co. Allimuthu and Co.
Rupees Fifteen Lakh Rs. , , /= Note No: For value received, I or We, the signers, promise to pay to the order of Charter State Bank of Chennai, Tamil Nadu, days from date, the principal sum of interest from date at the rate of % per year,