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Bill of Exchange — Account STD 11 Commerce — Question

CBSE BoardEnglish MediumSTD 11 CommerceAccountBill of Exchange3 Marks
Question
Define a Promissory Note. What are the features of a Promissory Note?
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Answer

'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.' -Section 4 of the Negotiable Instruments Act, 1881
Features of a Promissory Note:
  1. Promissory Note is an unconditional written undertaking to pay the specified amount.
  2. It is drawn and signed by the maker, i.e., promisor.
  3. It specifies the name of the payee, i.e., to whom payment is to be made.
  4. Specified amount is payable to the specified person or to his order or to the bearer.
  5. Date of payment is specified.

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