What are the conditions for promissory note?

Asked by: Deion Funk IV  |  Last update: July 18, 2025
Score: 5/5 (25 votes)

A promissory note typically contains all the terms involved, such as the principal debt amount, interest rate, maturity date, payment schedule, the date and place of issuance, and the issuer's signature.

What are the requirements for a promissory note to be valid?

A promissory note must include:
  • Parties Involved: Lists the lender and borrower.
  • Principal Amount: States the exact amount of money borrowed.
  • Interest Rate: Specifies the interest rate, if applicable.
  • Repayment Terms: Details the repayment schedule and dates.
  • Signatures: Both parties must sign to validate the agreement.

What are promissory conditions?

A promissory condition is a promise whose performance either suspends a duty of immediate performance until it occurs or gives rise to such duty upon its occurrence. A, non- promissory condition creates a privilege in the case of a condition precedent and a power in the case of a condition subsequent.

What makes a promissory note invalid?

A promissory note could become invalid if: It isn't signed by both parties. The note violates laws. One party tries to change the terms of the agreement without notifying the other party.

What three conditions are met for promissory estoppel?

Requirements of Promissory Estoppel

The promisee believed the promisor, and acted on that promise in good faith; The promisor later reneged on that promise causing financial harm to the promisee; and. The nature of the promise is such that the only way to avoid injustice is by enforcing the promise.

Promissory Notes Explained

19 related questions found

What are 4 conditions where the doctrine of promissory estoppel can be used?

3d 462], the Supreme Court stated the four basic elements of estoppel: (1) the part to be estopped must be apprised of the facts; (2) he must intend that his conduct shall be acted upon, or must so act that the part asserting the estoppel had a right to believe it was so intended; (3) the other party must be ignorant ...

What are the 5 elements of promissory estoppel?

In analyzing the application of section 90, the Washington courts have established five requirements for recovery in promissory estoppel: “(1) a promise which (2) the promisor should reasonably expect to cause the promisee to change position and (3) which does cause the promisee to change position (4) justifiably ...

What are the rules for promissory note?

The note must clearly mention only the promise of making the repayment and no other conditions. After issuance, a Promissory Note must be stamped according to the regulations of the Indian Stamp Act.

What makes a promissory note void?

Changes Made without a New Agreement

Modifying a promissory note without all parties' consent can void the note. Proper documentation and agreement through a new contract or amendment are necessary to maintain the note's validity.

What happens if the maker of a promissory note fails to pay?

If the maker fails to pay according to the terms of the promissory note, the holder can foreclose on the property that secured the note, thereby recovering the unpaid principal of the note, interest, fees and expenses. An unsecured promissory note is one that is not secured by any collateral.

Can a promissory note have conditions?

As with any contract, the promissory note will contain all the terms and conditions associated with the agreement that have been established between the two parties.

What is the promissory rule?

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.

What is primarily liable on a promissory note?

It is the maker who is primarily liable on a promissory note. The issuer of a note or the maker is one of the parties who, by means of a written promise, pay another party (the note's payee) a definite sum of money, either on demand or at a specified future date.

Does a promissory note hold up in a court of law?

Promissory notes are legally binding whether the note is secured by collateral or based only on the promise of repayment. If you lend money to someone who defaults on a promissory note and does not repay, you can legally possess any property that individual promised as collateral.

Is a notarized promissory note legally binding?

You can typically sign a legally binding promissory note that contains unconditional pledges to pay a certain sum of money. However, you can strengthen the legality of a valid promissory note by having it notarized. It never hurts to add a layer of protection as you may have to use it in court.

Can a promissory note be cancelled?

Upon Full Repayment: When the borrower has paid the principal and any applicable interest in full, the lender should cancel the note to signify that the borrower has satisfied their obligations.

What makes a note invalid?

Essential Elements: A valid promissory note must include a signature, date, sum, payer, and payee. Clear Payment Terms: Absence of clear payment terms can lead to the invalidity of a promissory note. Due Payment Date: Omission of a due payment date can render a promissory note invalid.

Which is false regarding a promissory note?

Answer and Explanation: The correct option is c: The incorrect statement is a promissory note is not a negotiable instrument. A promissory note is a promise made by the maker of the note to pay to the payee on a specific date or when demanded by the payee. These instruments are transferred and used as cash.

Can you go to jail for a promissory note?

In some circumstances, however, a promissory note is fraudulent and a promissory note scam is operated in order to improperly obtain investor funds. Promissory note fraud is a crime and those involved in a scam can face a lengthy prison sentence if convicted of fraud offenses.

What voids a promissory note?

A promissory note is a contract, a binding agreement that someone will pay your business a sum of money. However under some circumstances – if the note has been altered, it wasn't correctly written, or if you don't have the right to claim the debt – then, the contract becomes null and void.

What are the limitations of promissory note?

The time period for filing a suit for money recovery is 3 years from the date promissory note as per Art 35 of Limitation Act 1963 and as per sec 19 of Limitation Act, the fresh period of limitation must be computed in case of any payment was made or otherwise acknoledged the debt.

How do you make a promissory note valid?

A promissory note must be signed by the borrower to be valid. You may want the borrower to sign in front of a notary to ensure the signature is authentic. The lender keeps the original promissory note and the borrower should receive a copy.

Can you sue someone who promised you money?

The short answer is yes, you may have a claim for someone who broke a promise to you.

What is the essential element of promissory note?

To be considered valid, a promissory note must contain the five essential elements outlined above. These elements include identification of the parties, amount and terms of the loan, promise to pay, date and signatures, and governing law.

What is an example of an enforceable promise?

Melvin one hundred dollars. Seth may repudiate the contract, but he does not. When he turns eighteen, he renews his promise to pay the one hundred dollars. This promise is binding.