What is the Meaning of: Promissory note | Concept and Definition of: Promissory note
A promissory note is a document containing an unconditional promise of payment. The person issuing it, the Subscriber, agrees to pay a certain sum of money to a certain term to someone else (the beneficiary). For example: "do not worry. Tomorrow, I give you a promissory note to conclude the operation. "
As a formal payment instrument, a promissory note must meet validity requirements. The document should include, either at the beginning or elsewhere, the words "promissory note" to identify it as such. In addition, it must detail the amount of money to pay and interest in all letters as well as numbers. It is important to mention that the promissory note requires payment to the stipulated date, contrary to the Bill of Exchange.
The name of the recipient (whether a physical or legal person), the date and place of payment, the date and place of subscription so that the signature of the Subscriber are also part of the formal requirements of the ticket order.
Promissory note is transferable by endorsement provided that the total amount to be transmitted (i.e., the transmission by endorsement of the partial sum of the promissory note is not possible).
The partial payment is a choice to which the Subscriber has the right and which must be necessarily accepted by the beneficiary, which should keep the document until what he receives full payment. Following the methodology, whenever the beneficiary receives a partial payment, it must noted on the body of the promissory note and issue a receipt.