Editing Promissory note

{{Short description|Legal instrument of payment}}
[[File:Burma 1926 Promissory Note.jpg|thumb|upright=1.4|A 1926 promissory note from the [[Imperial Bank of India]], Rangoon, Burma for 20,000 [[rupee]]s plus [[interest]]]]

A '''promissory note''', sometimes referred to as a '''note payable''', is a [[legal instrument]] (more particularly, a financing instrument and a [[debt]] instrument), in which one party (the ''maker'' or ''issuer'') promises in writing to pay a determinate sum of [[money]] to the other (the ''payee''),<ref>{{cite book |last1=Garner |first1=Bryan A. |title=A dictionary of modern legal usage |date=1987 |publisher=Oxford Univ. Pr |location=New York |isbn=9780195043778 |page=702}}</ref> subject to any terms and conditions specified within the document.<ref>{{cite journal |last1=Aigler |first1=Ralph W. |title=Conditions in Bills and Notes |journal=Michigan Law Review |date=1928 |volume=26 |issue=5 |pages=471–501 |doi=10.2307/1279114 |jstor=1279114 }}</ref>

==Overview==
The terms of a note typically include the [[:wikt:principal|principal]] amount, the [[interest rate]] if any, the parties, the date, the terms of repayment (which could include interest) and the [[maturity date]].  Sometimes, provisions are included concerning the payee's rights in the event of a [[default (finance)|default]], which may include [[foreclosure]] of the maker's assets. In foreclosures and contract breaches, promissory notes under CPLR 5001 allow creditors to recover prejudgement interest from the date interest is due until liability is established.<ref>{{Cite web|url=https://www.law.com/newyorklawjournal/almID/1202783474120/a-practitioners-guide-to-understanding-interest/|title=A Practitioner's Guide to Understanding Interest|access-date=2019-06-19|archive-date=2019-06-19|archive-url=https://web.archive.org/web/20190619155723/https://www.law.com/newyorklawjournal/almID/1202783474120/a-practitioners-guide-to-understanding-interest/|url-status=live}}</ref><ref>{{Cite web|url = https://www.lexology.com/library/detail.aspx?g=91f44894-2f04-489d-8280-b671c72f99f3|title = Consideration of Pre-Judgment Interest in Evaluating the Risk of Litigation|date = 28 June 2017|access-date = 18 June 2019|archive-date = 13 February 2020|archive-url = https://web.archive.org/web/20200213102122/https://www.lexology.com/library/detail.aspx?g=91f44894-2f04-489d-8280-b671c72f99f3|url-status = live}}</ref> For loans between individuals, writing and signing a promissory note are often instrumental for tax and record keeping. A promissory note alone is typically unsecured.

===Terminology===
The term note payable is commonly used in [[accounting]] (as distinguished from [[accounts payable]]) or commonly as just a "note", it is internationally defined by the ''Convention providing a uniform law for bills of exchange and promissory notes'', but regional variations exist. A [[banknote]] is frequently referred to as a promissory note, as it is made by a bank and payable to bearer on demand. [[Mortgage note]]s or real estate notes are other forms of promissory note.

A promissory note is said to be a [[negotiable instrument]] when it contains an unconditional promise.<ref>{{cite journal |last1=Whaley |first1=Douglas J. |title=Mortgage Foreclosures, Promissory Notes, and the Uniform Commercial Code |journal=Western State University Law Review |date=2011 |volume=39 |page=313}}</ref>

'''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.

Promissory notes may be used in combination with [[security agreement]]s. For example, a promissory note may be used in combination with a [[mortgage law|mortgage]], in which case it is called a [[mortgage note]].

====Loan contracts====
In common speech, other terms, such as "[[loan]]", "[[loan agreement]]", and "loan contract" may be used interchangeably with "promissory note". The term "loan contract" is often used to describe a contract that is lengthy and detailed.

A promissory note is very similar to a loan. Each is a legally binding contract to unconditionally repay a specified amount within a defined time frame. However, a promissory note is generally less detailed and less rigid than a loan contract.<ref>{{cite web|url=http://www.investopedia.com/terms/p/promissorynote.asp|title=Promissory Note|author=Investopedia Staff|date=25 November 2003|website=investopedia.com|access-date=30 March 2018|archive-date=29 March 2018|archive-url=https://web.archive.org/web/20180329015829/https://www.investopedia.com/terms/p/promissorynote.asp|url-status=live}}</ref> For one thing, loan agreements often require repayment in installments, while promissory notes typically do not. Furthermore, a loan agreement usually includes the terms for recourse in the case of default, such as establishing the right to foreclose, while a promissory note does not.

====Difference from IOU====
Promissory notes differ from [[IOU (debt)|IOU]]s in that they contain a specific promise to pay along with the steps and timeline for repayment as well as consequences if repayment fails.<ref>{{cite web|last=Beattie|first=Andrew|title=Promissory Notes: Not Your Average IOU|url=http://www.investopedia.com/articles/bonds/07/promissory_note.asp|publisher=[[Investopedia]]|access-date=27 May 2014|archive-date=25 May 2014|archive-url=https://web.archive.org/web/20140525011443/http://www.investopedia.com/articles/bonds/07/promissory_note.asp|url-status=live}}</ref> IOUs only acknowledge that a debt exists.<ref>{{cite web|title=IOU|url=http://www.investopedia.com/terms/i/iou.asp|website=Investopedia|publisher=Investopedia, LLC|access-date=23 May 2017|archive-date=12 May 2017|archive-url=https://web.archive.org/web/20170512042253/http://www.investopedia.com/terms/i/iou.asp|url-status=live}}</ref>

===Negotiability===
[[Negotiable instrument]]s are unconditional and impose few to no duties on the issuer or payee other than payment. In the United States, whether a promissory note is a negotiable instrument can have significant legal impacts, as only negotiable instruments are subject to Article 3 of the Uniform Commercial Code and the application of the [[holder in due course]] rule.<ref name=Whaley>Whaley DJ. (2012). [http://wsulawreview.org/DWhaley.pdf Mortgage Foreclosures, Promissory Notes, and the Uniform Commercial Code] {{Webarchive|url=https://web.archive.org/web/20130612123941/http://wsulawreview.org/DWhaley.pdf |date=2013-06-12 }}. ''Western State University Law Review''. [https://litigation-essentials.lexisnexis.com/webcd/app?action=DocumentDisplay&crawlid=1&doctype=cite&docid=39+W.+St.+U.+L.+Rev.+313&srctype=smi&srcid=3B15&key=b4ff3146a501f1f969b427ea9ebfba75 LexisNexis entry] {{Webarchive|url=https://web.archive.org/web/20130525164935/https://litigation-essentials.lexisnexis.com/webcd/app?action=DocumentDisplay&crawlid=1&doctype=cite&docid=39+W.+St.+U.+L.+Rev.+313&srctype=smi&srcid=3B15&key=b4ff3146a501f1f969b427ea9ebfba75 |date=2013-05-25 }}</ref> The negotiability of [[mortgage note]]s has been debated, particularly due to the obligations and "baggage" associated with mortgages; however, in mortgages notes are often determined to be negotiable instruments.<ref name=Whaley/>

In the United States, the Non-Negotiable Long Form Promissory Note is not required.<ref>{{cite web|title=Non-Negotiable Long Form Promissory Note|url=http://us.practicallaw.com/6-508-0668|access-date=27 May 2014|archive-date=12 October 2014|archive-url=https://web.archive.org/web/20141012203146/http://us.practicallaw.com/6-508-0668|url-status=live}}</ref>

===Use as financial instruments===
Promissory notes are a common financial instrument in many jurisdictions, employed as [[commercial paper]] principally for the short time financing of companies. Often, the seller or provider of a service is not paid upfront by the buyer (usually, another company), but within a period of time, the length of which has been agreed upon by both the seller and the buyer. The reasons for this may vary; historically, many companies used to balance their books and execute payments and debts at the end of each week or tax month; any product bought before that time would be paid only then. Depending on the jurisdiction, this [[Standard of deferred payment|deferred payment period]] can be regulated by law; in countries like [[France]], [[Italy]] or [[Spain]], it usually ranges between 30 and 90 days after the purchase.<ref>{{cite web|url=http://www.lesclesdelabanque.com/Web/Cdb/Entrepreneurs/Content.nsf/DocumentsByIDWeb/7PUHXY?OpenDocument|title=La lettre de change et la LCR|first=Les clés de la banque-|last=FBF|website=Les clés de la banque Entrepreneurs|access-date=30 March 2018|archive-date=31 March 2018|archive-url=https://web.archive.org/web/20180331040508/https://www.lesclesdelabanque.com/Web/Cdb/Entrepreneurs/Content.nsf/DocumentsByIDWeb/7PUHXY?OpenDocument|url-status=live}}</ref>

When a company engages in many of such transactions, for instance by having provided services to many customers all of whom then deferred their payment, it is possible that the company may be owed enough money that its own liquidity position (i.e., the amount of cash it holds) is hampered, and finds itself unable to honour their own debts, despite the fact that by the books, the company remains solvent. In those cases, the company has the option of asking the bank for a short-term loan, or using any other such short-term financial arrangements to avoid [[insolvency]]. However, in jurisdictions where promissory notes are commonplace, the company (called the ''payee'' or ''lender'') can ask one of its debtors (called the ''maker'', ''borrower'' or ''payor'') to ''accept'' a promissory note, whereby the maker signs a legally binding agreement to honour the amount established in the promissory note (usually, part or all its debt) within the agreed period of time.<ref>{{cite book|last1=Hinkel|first1=Daniel F.|title=Essentials of Practical Real Estate Law|date=2012|publisher=Cengage Learning|isbn=978-1133421498|pages=174–175|url=https://books.google.com/books?id=9XoJAAAAQBAJ|access-date=11 May 2018|archive-date=1 July 2023|archive-url=https://web.archive.org/web/20230701101212/https://books.google.com/books?id=9XoJAAAAQBAJ|url-status=live}}</ref> The lender can then take the promissory note to a financial institution (usually a bank, albeit this could also be a private person, or another company), that will exchange the promissory note for cash; usually, the promissory note is cashed in for the amount established in the promissory note, less a small discount.

Once the promissory note reaches its ''maturity date'', its current holder (the bank) can execute it over the emitter of the note (the debtor), who would have to pay the bank the amount ''promised'' in the note. If the maker fails to pay, however, the bank retains the right to go to the company that cashed the promissory note in, and demand payment. In the case of unsecured promissory notes, the lender accepts the promissory note based solely on the maker's ability to repay; if the maker fails to pay, the lender must honour the debt to the bank. In the case of a secured promissory note, the lender accepts the promissory note based on the maker's ability to repay, but the note is secured by a thing of value; if the maker fails to pay and the bank reclaims payment, the lender has the right to execute the security.<ref>{{cite web|url=https://www.sec.gov/investor/pubs/promise.htm|title=SEC.gov - Broken Promises: Promissory Note Fraud|website=www.sec.gov|access-date=30 March 2018|archive-date=19 September 2018|archive-url=https://web.archive.org/web/20180919024056/https://www.sec.gov/investor/pubs/promise.htm|url-status=live}}</ref>

===Use as private money===
Thus, promissory notes can work as a form of private money. In the past, particularly during the 19th century, their widespread and unregulated use was a source of great risk for banks and private financiers, who would often face the insolvency of both debtors, or simply be scammed by both.

==History==
{{Css Image Crop|Image = SUD-S106a-Siege of Khartoum-500 Piastres (1884).jpg|bSize = 205|cWidth = 200|cHeight = 128|oTop = 2|oLeft = 2|Location = right|Description={{center|500 [[piastre]] promissory note issued and hand-signed by Gen. [[Charles George Gordon|Gordon]] during the [[Siege of Khartoum currency|Siege of Khartoum]] (1884) payable six months from the date of issue.<ref>{{Cite book |url=https://books.google.com/books?id=22dKPgAACAAJ&q=standard+catalog+of+specialized+issues|pages=1069–70|title= Standard Catalog of World Paper Money Specialized Issues|edition=11th|publisher=Krause|isbn=978-1-4402-0450-0|editor-last=Cuhaj|editor-first=George S.|year=2009}}</ref>}}}}
[[Code of Hammurabi#Laws|Code of Hammurabi Law 100]] stipulated [[Debt#Repayment|repayment]] of a [[loan]] by a [[debtor]] to a [[creditor]] on a [[Repayment plan|schedule]] with a [[maturity date]] specified in [[Contract|written]] [[contractual term]]s.<ref name="Sommer 1903 p. 75">{{cite journal|translator-last=Sommer|translator-first=Otto|author=Hammurabi|author-link=Hammurabi|title=Code of Hammurabi, King of Babylon|year=1903|journal=Records of the Past|place=[[Washington, D.C.|Washington, DC]]|publisher=[[Records of the Past Exploration Society]]|volume=2|issue=3|page=[https://archive.org/details/cu31924060109703/page/n15/mode/2up 75]|access-date=June 20, 2021|url=https://archive.org/details/cu31924060109703/mode/2up|quote=100. Anyone borrowing money shall ... his contract [for payment].}}</ref><ref name="Harper 1904 p. 35">{{cite web|translator-last=Harper|translator-first=Robert Francis|author=Hammurabi|author-link=Hammurabi|year=1904|title=Code of Hammurabi, King of Babylon|place=[[Chicago]]|publisher=[[University of Chicago Press]]|edition=2nd|page=[https://oll.libertyfund.org/title/hammurabi-the-code-of-hammurabi#lf0762_label_321 35]|website=[[Liberty Fund]]|url=https://oll-resources.s3.us-east-2.amazonaws.com/oll3/store/titles/1276/0762_Bk.pdf|access-date=June 20, 2021|quote=§100. ...he shall write down ... returns to his merchant.|archive-date=June 13, 2021|archive-url=https://web.archive.org/web/20210613091052/https://oll-resources.s3.us-east-2.amazonaws.com/oll3/store/titles/1276/0762_Bk.pdf|url-status=live}}</ref><ref name="King 1910">{{cite web|translator-last=King|translator-first=Leonard William|author=Hammurabi|author-link=Hammurabi|year=1910|title=Code of Hammurabi, King of Babylon|place=[[New Haven, Connecticut|New Haven, CT]]|publisher=[[Yale Law School]]|website=[[Avalon Project]]|url=https://avalon.law.yale.edu/ancient/hamframe.asp|access-date=June 20, 2021|archive-date=May 10, 2021|archive-url=https://web.archive.org/web/20210510072841/https://avalon.law.yale.edu/ancient/hamframe.asp|url-status=live}}</ref> Law 122 stipulated that a [[Deposit account|depositor]] of [[gold]], [[silver]], or other [[Personal property|chattel/movable property]] for [[safe]]keeping must present all articles and a signed contract of [[bailment]] to a [[notary]] before depositing the articles with a [[Banker (ancient)#Mesopotamia|banker]], and Law 123 stipulated that a banker was discharged of any [[Liability (accounting)|liability]] from a contract of bailment if the notary denied the existence of the contract. Law 124 stipulated that a depositor with a [[Banknote|notarized contract of bailment]] was entitled to [[Redemption value|redeem the entire value of their deposit]], and Law 125 stipulated that a banker was [[Legal liability|liable]] for replacement of deposits [[Theft|stolen]] while in their [[Possession (law)|possession]].<ref name="Sommer 1903 p. 77">{{cite journal|translator-last=Sommer|translator-first=Otto|author=Hammurabi|author-link=Hammurabi|title=Code of Hammurabi, King of Babylon|year=1903|journal=Records of the Past|place=[[Washington, D.C.|Washington, DC]]|publisher=[[Records of the Past Exploration Society]]|volume=2|issue=3|page=[https://archive.org/details/cu31924060109703/page/n17/mode/2up 77]|access-date=June 20, 2021|url=https://archive.org/details/cu31924060109703/mode/2up|quote=122. If anyone entrusts to ... have committed an offence.}}</ref><ref name="Harper 1904 p. 43">{{cite web|translator-last=Harper|translator-first=Robert Francis|author=Hammurabi|author-link=Hammurabi|year=1904|title=Code of Hammurabi, King of Babylon|place=[[Chicago]]|publisher=[[University of Chicago Press]]|edition=2nd|page=[https://oll.libertyfund.org/title/hammurabi-the-code-of-hammurabi#lf0762_label_343 43]|website=[[Liberty Fund]]|url=https://oll-resources.s3.us-east-2.amazonaws.com/oll3/store/titles/1276/0762_Bk.pdf|access-date=June 20, 2021|quote=§122. If a man give ... it from the thief.|archive-date=June 13, 2021|archive-url=https://web.archive.org/web/20210613091052/https://oll-resources.s3.us-east-2.amazonaws.com/oll3/store/titles/1276/0762_Bk.pdf|url-status=live}}</ref><ref name="King 1910" />
In China during the [[Han dynasty]] promissory notes appeared in 118 BC and were made of leather.<ref name="NOVA - The History of Money">{{cite web|url=https://www.pbs.org/wgbh/nova/ancient/history-money.html|title=NOVA - The History of Money|work=pbs.org|date=26 October 1996|access-date=8 December 2018|archive-date=25 August 2017|archive-url=https://web.archive.org/web/20170825185527/http://www.pbs.org/wgbh/nova/ancient/history-money.html|url-status=live}}</ref> The Romans may have used promissory notes in 57 AD as a durable lightweight substance as evidence of a promise in that time has been found in London among the [[Bloomberg tablets]].<ref name="nationalgeographic.com">{{Cite news|url=https://www.nationalgeographic.com/history/article/ancient-rome-London-Londinum-Bloomberg-archaeology-Boudicca-archaeology/|title=Ancient Roman IOUs Found Beneath Bloomberg's New London HQ|date=2016-06-01|access-date=2018-06-09|archive-date=2021-03-10|archive-url=https://web.archive.org/web/20210310041121/http://www.nationalgeographic.com/history/article/ancient-rome-London-Londinum-Bloomberg-archaeology-Boudicca-archaeology|url-status=dead}}</ref>

[[Ancient Carthage|Carthage]] was purported to have issued lightweight promissory notes on parchment or leather before 146 BC.<ref>{{Cite book |last=Jones |first=John Percival |url=https://books.google.com/books?id=IW4vAQAAMAAJ&pg=RA1-PA10 |title=Speeches of J.P. Jones: Money and Tariff, 1890–93 |date=1890 |language=en |access-date=24 August 2017 |archive-url=https://web.archive.org/web/20230701100356/https://books.google.com/books?id=IW4vAQAAMAAJ&pg=RA1-PA10 |archive-date=1 July 2023 |url-status=live}}</ref><ref>{{Cite book |last=Moulton |first=Luther Vanhorn |url=https://archive.org/details/sciencemoneyand00moulgoog |title=The Science of Money and American Finances. |date=1880 |publisher=Co-operative Press |page=[https://archive.org/details/sciencemoneyand00moulgoog/page/n141 134] |language=en}}</ref><ref>{{Cite book |last=Wells |first=H. G. |url=https://archive.org/details/outlineofhistory00wellrich |title=The outline of history, being a plain history of life and mankind |date=1921 |publisher=The Macmillan Company |location=New York}}</ref> In China during the [[Han dynasty]] promissory notes appeared in 118 BC and were made of leather.<ref name="NOVA - The History of Money"/> The Romans may have used promissory notes in 57 AD as a durable lightweight substance as evidence of a promise in that time has been found in London among the [[Bloomberg tablets]].<ref name="nationalgeographic.com"/>

Historically, promissory notes have acted as a form of privately issued [[currency]]. [[Flying cash]] or ''feiqian'' was a promissory note used during the [[Tang dynasty]] (618 – 907). Flying cash was regularly used by Chinese tea merchants, and could be exchanged for hard currency at provincial capitals.<ref name="Origins of value">{{cite book|author1=William N. Goetzmann|author2=K. Geert Rouwenhorst|title=The Origins of Value: The Financial Innovations that Created Modern Capital Markets|year=2005|publisher=Oxford University Press|isbn=978-0-19-517571-4|page=68}}</ref> The Chinese concept of promissory notes was introduced by Marco Polo to Europe.<ref name="Marco Polo">{{cite book|author=Marco Polo|title=The Travels of Marco Polo, a Venetian, in the Thirteenth Century: Being a Description, by that Early Traveller, of Remarkable Places and Things, in the Eastern Parts of the World|url=https://books.google.com/books?id=JetQAAAAcAAJ&pg=PA353|access-date=19 September 2012|year=1818|pages=353–355|archive-date=1 July 2023|archive-url=https://web.archive.org/web/20230701100424/https://books.google.com/books?id=JetQAAAAcAAJ&pg=PA353|url-status=live}}</ref>

According to tradition, in 1325 a promissory note was signed in [[Milan]]. However, according to a travelogue of a visit to Prague in 960 by [[Ibrahim ibn Yaqub]], small pieces of cloth were used as a means of trade, with these cloths having a set exchange rate versus silver.<ref>Jankowiak, Marek. ''Dirhams for slaves''. Medieval Seminar, All Souls, 2012, p.8</ref> Around 1150 the [[History of the Knights Templar#Bankers|Knights Templar]] issued promissory notes to pilgrims, pilgrims deposited their valuables with a local Templar preceptory before embarking, received a document indicating the value of their deposit, then used that document upon arrival in the Holy Land to retrieve their funds in an amount of treasure of equal value.<ref>{{cite journal |last1=Sarnowsky |first1=Jürgen |title=Templar Order |journal=Religion Past and Present Online |date=2011-04-11 |doi=10.1163/1877-5888_rpp_com_125078 |publisher=Brill |language=en |issn=1877-5888}}</ref><ref>{{Cite book|title=The Knights Templar : the history and myths of the legendary military order|author=Martin, Sean|date=2004|publisher=Thunder's Mouth Press|isbn=978-1560256458|edition=1st Thunder's Mouth Press|location=New York|oclc=57175151|url-access=registration|url=https://archive.org/details/knightstemplarhi00mart}}</ref>

Around 1348 in [[Görlitz]], Germany, the Jewish creditor [[Adasse (townswoman)|Adasse]] owned a promissory note for 71 marks.<ref name=":0">{{Cite book|last=Uitz|first=Erika|url=https://books.google.com/books?id=gE4FAQAAIAAJ&q=%22adasse%22+medieval+jewish+woman|title=The Legend of Good Women: Medieval Women in Towns & Cities|date=1990|publisher=Moyer Bell Limited|isbn=978-1-55921-013-3|language=en|access-date=2021-07-31|archive-date=2023-07-01|archive-url=https://web.archive.org/web/20230701101212/https://books.google.com/books?id=gE4FAQAAIAAJ&q=%22adasse%22+medieval+jewish+woman|url-status=live}}</ref> There is also evidence of promissory notes being issued in 1384 between [[Genoa]] and [[Barcelona]], although the letters themselves are lost. The same happens for the ones issued in Valencia in 1371 by Bernat de Codinachs for Manuel d'Entença, a merchant from [[Huesca]] (then part of the [[Crown of Aragon]]), amounting a total of 100 florins.<ref>As noted by Manuel Sanchis Guarner in ''La Ciutat de València''. Ajuntament de València, València. Cinquena Edició 1989, plana 172. Quote in [[Catalan language|Catalan]]
{{blockquote|Onorables senyors, nosaltres havem pres ací en Monsó, C florins de cambi de mossén Manuel d'Entença..., vos plàcia complir e donar aquí en València, per ell al honrat En Bernat de Codinachs, vista la present. Per la lletra que us enviam, vos fem saber aquells havíem ops. Plàtia-us, senyors, aquest cambi aja bon compliment.}}</ref> In all these cases, the promissory notes were used as a rudimentary system of paper money, for the amounts issued could not be easily transported in metal coins between the cities involved. [[Strozzi family|Ginaldo Giovanni Battista Strozzi]] issued an early form of promissory note in [[Medina del Campo]] ([[Spain]]), against the city of [[Besançon]] in 1553.<ref>{{cite web|title=La primera Letra de Cambio|url=http://www.delsolmedina.com/La%20primera%20letra%20de%20cambio.htm|access-date=27 May 2014|archive-date=13 December 2020|archive-url=https://web.archive.org/web/20201213155359/http://www.delsolmedina.com/La%20primera%20letra%20de%20cambio.htm|url-status=dead}}</ref> However, there exists notice of promissory notes being in used in Mediterranean commerce well before that date.

In 2005, the Korean Ministry of Justice and a consortium of financial institutions announced the service of an electronic promissory note (eNote) service, after years of development, allowing entities to make promissory notes (notes payable) in business transactions digitally instead of on paper, for the first time in the world.<ref>{{Cite web|url = http://www.cargonews.co.kr/news/articleView.html?idxno=3312|title = 세계 최초, 전자어음 시대 본격 출발|date = 26 September 2005|access-date = 21 December 2018|archive-date = 21 December 2018|archive-url = https://web.archive.org/web/20181221182641/http://www.cargonews.co.kr/news/articleView.html?idxno=3312|url-status = live}}</ref><ref>{{Cite web|url=https://m.lawtimes.co.kr/Content/Article?serial=15292|title=세계최초 '전자어음' 5월부터 본격 유통|date=January 28, 2005|website=m.lawtimes.co.kr|access-date=December 21, 2018|archive-date=December 21, 2018|archive-url=https://web.archive.org/web/20181221090746/https://m.lawtimes.co.kr/Content/Article?serial=15292|url-status=live}}</ref><ref>{{Cite web|url = https://news.sbs.co.kr/news/endPage.do?news_id=N1000009781|title = 세계 최초 '전자어음' 발행|date = 28 September 2005|access-date = 21 December 2018|archive-date = 21 December 2018|archive-url = https://web.archive.org/web/20181221134623/https://news.sbs.co.kr/news/endPage.do?news_id=N1000009781|url-status = live}}</ref><ref>{{cite web|url=https://corp.fhlbatl.com/files/documents/electronic-promissory-note-acceptance-requirements.pdf|title=Electronic Promissory Notes (eNotes) Model Collateral Acceptance Requirements and Guidelines|publisher=[[Federal Home Loan Banks|FHL Bank Atlanta]]|date=14 May 2020|accessdate=8 April 2021|archive-date=9 May 2021|archive-url=https://web.archive.org/web/20210509193806/https://corp.fhlbatl.com/files/documents/electronic-promissory-note-acceptance-requirements.pdf|url-status=live}}</ref>

In the United States, eNotes were made possible as a result of the [[Electronic Signatures in Global and National Commerce Act]] in 2000 and the [[Uniform Electronic Transactions Act]] (UETA).<ref name=ice>{{cite web|url=https://www.theice.com/publicdocs/eNote_White_Paper.pdf|title=Enabled by Lenders, Embraced by Borrowers, Enforced by the Courts: What You Need to Know About Enotes|last1=Tank|first1=Margo H.K.|last2=Whitaker|first2=R. David|publisher=[[Intercontinental Exchange]]|date=1 May 2018|accessdate=9 April 2021|archive-date=20 December 2021|archive-url=https://web.archive.org/web/20211220170239/https://www.theice.com/publicdocs/eNote_White_Paper.pdf|url-status=live}}</ref>{{rp|2}} An eNote must meet all the requirements to be a written promissory note.<ref name=ice/>{{rp|3}}

===International law===
In 1930, under the League of Nations, a ''Convention providing a uniform law for bills of exchange and promissory notes'' was drafted and ratified by eighteen nations.<ref>{{cite web|title=Convention Providing a Uniform Law for Bills of Exchange and Promissory Notes|url=http://www.jus.uio.no/english/services/library/treaties/09/9-03/bills-exchange-notes.xml|publisher=UiO|access-date=27 May 2014|archive-date=24 September 2014|archive-url=https://web.archive.org/web/20140924041255/http://www.jus.uio.no/english/services/library/treaties/09/9-03/bills-exchange-notes.xml|url-status=live}}</ref><ref>{{cite web|title=Convention providing a Uniform Law for Bills of Exchange and Promissory Notes|url=https://treaties.un.org/Pages/LONViewDetails.aspx?src=LON&id=551&chapter=30&clang=_en|website=United Nations Treaty Collection|publisher=United Nations|access-date=11 May 2018|date=7 June 1930|archive-date=25 April 2018|archive-url=https://web.archive.org/web/20180425032000/https://treaties.un.org/Pages/LONViewDetails.aspx?src=LON&id=551&chapter=30&clang=_en|url-status=dead}}</ref> Article 75 of the treaty stated that a promissory note shall contain:
* the term "''promissory note''" inserted in the body of the instrument and expressed in the language employed in drawing up the instrument
* an unconditional promise to pay a determinate sum of money;
* a statement of the time of payment;
* a statement of the place where payment is to be made;
* the name of the person to whom or to whose order payment is to be made;
* a statement of the date and of the place where the promissory note is issued;
* the signature of the person who issues the instrument (maker).

==Worldwide==
===England and Wales===
{{cquote|'''§ 83. BILLS OF EXCHANGE ACT 1882. Part IV.<ref name="BILLS OF EXCHANGE ACT 1882">{{Cite web|url=http://www.legislation.gov.uk/ukpga/Vict/45-46/61/section/83|title=Bills of Exchange Act 1882|access-date=2011-01-29|archive-date=2011-10-17|archive-url=https://web.archive.org/web/20111017130742/http://www.legislation.gov.uk/ukpga/Vict/45-46/61/section/83|url-status=live}}</ref>'''

'''...'''

''' Promissory note defined'''

(1) A promissory note is an unconditional promise in writing made by one person to another signed by the maker, engaging to pay, on demand or at a fixed or determinable future time, a sum certain in money, to, or to the order of, a specified person or to bearer.

(2) An instrument in the form of a note payable to maker’s order is not a note within the meaning of this section unless and until it is indorsed by the maker.

(3) A note is not invalid by reason only that it contains also a pledge of collateral security with authority to sell or dispose thereof.

(4) A note which is, or on the face of it purports to be, both made and payable within the British Islands is an inland note. Any other note is a foreign note.}}

===United States===
[[File:Promissory note - 2nd Bank of US $1000.jpg|thumb|A promissory note issued by the [[Second Bank of the United States]], December 15, 1840, for the amount of $1,000]]
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 called [[mortgage note]]s are used extensively in combination with [[Mortgage law|mortgages]] in the financing of [[real estate]] transactions. One prominent example is the [[Fannie Mae]] model [[standard form contract]] Multistate Fixed-Rate Note 3200, which is publicly available.<ref>{{cite web|title=Notes|url=https://www.fanniemae.com/singlefamily/notes|publisher=[[FannieMae]]|access-date=27 May 2014|archive-date=4 March 2014|archive-url=https://web.archive.org/web/20140304174006/https://www.fanniemae.com/singlefamily/notes|url-status=live}}</ref> Promissory notes, or [[commercial paper]]s, are also issued to provide capital to businesses. However, promissory notes act as a source of finance to the company's creditors.

The various State law enactments of the Uniform Commercial Code define what is and what is not a promissory note, in section 3-104(d):

{{cquote|'''§ 3-104. NEGOTIABLE INSTRUMENT.'''

'''...'''

'''(d) A promise or order other than a check is not an instrument if, at the time it is issued or first comes into possession of a holder, it contains a conspicuous statement, however expressed, to the effect that the promise or order is not negotiable or is not an instrument governed by this Article.'''}}

Thus, a writing containing such a disclaimer removes such a writing from the definition of ''negotiable instrument'', instead simply memorializing a [[contract]].

==See also==
{{Wiktionary}}
{{colbegin|colwidth=30em}}
*[[Bond (finance)]]
*[[Credit card]]
*[[Government bond]]
*[[Letter of credit]], used for import-export business
*[[Notes receivable]]
*[[Student loan]]
*[[Warrant of payment|Warrant (of Payment)]]
{{colend}}

==References==
{{Commons category|Promissory notes}}
{{Reflist|30em}}

{{Means of Exchange}}
{{Debt}}
{{Authority control}}

{{DEFAULTSORT:Promissory Note}}
[[Category:Legal documents]]
[[Category:Negotiable instrument law]]
[[Category:Securities (finance)]]
[[Category:Interest-bearing instruments]]