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Promissory note
Promissory note
instrumental for tax and record keeping. In the United States, a promissory note that meets certain conditions is a negotiable instrument regulated by article 3 of the Uniform Commercial Code. Negotiable promissory notes are used extensively in combination with mortgages in the financing of real estate transactions. Promissory notes, or commercial papers, are also issued to provide capital to businesses. Historically, promissory notes have acted as a form of privately issued currency. In many jurisdictions today, bearer negotiable promissory notes are illegal because they can act as an alternative currency. All Scottish and Northern Irish banknotes are essentially standardized promissory notes payable on demand.
A promissory note issued by the Second Bank of the United States, December 15, 1840, for the amount of $1,000. A promissory note, referred to as a note payable in accounting, is a contract where one party (the maker or issuer) makes an unconditional promise in writing to pay a sum of money to the other (the payee), either at a fixed or determinable future time or on demand of the payee, under specific terms. They differ from IOUs in that they contain a specific promise to pay, rather than simply acknowledging that a debt exists.
See also
• • • • • • Bank note Treasury note Bond (finance) Credit card Letter of credit Student loan
Overview
The terms of a note typically include the principal amount, the interest rate if any, and the maturity date. Sometimes, provisions are included concerning the payee’s rights in the event of a default, which may include foreclosure of the maker’s assets. Demand promissory notes are notes that do not carry a specific maturity date, but are due on demand of the lender. Usually the lender will only give the borrower a few days notice before the payment is due.[1] For loans between individuals, writing and signing a promissory note are often
References
[1] , http://www.documatica-forms.com/usa/ promissory-note/more-info.php
External links
• The Wiktionary definition of promissory note
Retrieved from "http://en.wikipedia.org/wiki/Promissory_note" Categories: Personal finance, Real estate, Legal documents, Negotiable instrument law This page was last modified on 5 April 2009, at 06:30 (UTC). All text is available under the terms of the GNU Free Documentation License. (See Copyrights for details.) Wikipedia® is a registered trademark of the Wikimedia Foundation, Inc., a U.S. registered 501(c)(3) taxdeductible nonprofit charity. Privacy policy About Wikipedia Disclaimers
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