online dictionaries of abbreviations

C E F I L N O P R T V W
PE PN

PN

Promissory Note
A contract detailing the terms of a promise by one party (the maker) to pay a sum of money to the other (the payee). The obligation may arise from the repayment of a loan or from another form of debt. For example, in the sale of a business, the purchase price might be a combination of an immediate cash payment and one or more promissory notes for the balance.

The terms of a note typically include the principal amount, the interest rate if any, and the maturity date. Sometimes there will be provisions concerning the payee's rights in the event of a default, which may include foreclosure of the maker's interest. 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.

For loans between individuals, writing and signing a promissory note is often considered a good idea for tax and recordkeeping reasons.

A promissory note differs from an IOU in that the latter is a simple acknowledgement of the existence of a debt owed, whereas a promissory note, as its name implies, contains an affirmative undertaking to pay the amount stated.
See also: IOU

Need more information on PN?
to main page Top 10FeedbackAbout top of page
© 2008 Admin User XHTML | CSS Powered by Glossword 1.8.12