Different types of Negotiable InstrumentLaw 5Submitted to: Sir Alexis AgmataSubmitted by: Simbajon, Alejandro
1. Promissory notea legal instrument (more particularly, a financial instrument anda debt instrument), in which one party promises in writing to pay adeterminate sum of money to the other either at a fixed ordeterminable future time or on demand of the payee, under specificterms.common financial instrument in many jurisdictions, employedprincipally for short time financing of companies.can work as a form of private money.may be used in combination with security agreements.unconditional and readily saleablePromissory notes differ from IOUs in that they contain a specificpromise to pay along with the steps and timeline for repayment aswell as consequences if repayment fails. IOUs only acknowledgethat a debt exists.
Examples of promissory note:
WHAT DOES A PROMISSORY NOTE INCLUDE?Name of payee and makerAddress of borrowerAmount of money borrowedLength of loan periodWhether you will charge interest and what the rate isDefaulting on loan and penalty informationWhether it is secured or unsecuredSignatures and witness signatures