A promissory note is an unconditional promise to pay a certain amount of money to a named party or the holder of the note, or to deposit that money as such persons direct. A promissory note must be in writing and signed by the maker of the promise. A frequent type of promissory note used by banks is a certificate of deposit. Promissory notes are considered a type of commercial paper and are often regulated under contract law.
New York’s Uniform Commercial Code §9-102 defines a promissory note as “an instrument that evidences a promise to pay a monetary obligation, does not evidence an order to pay, and does not contain an acknowledgment by a bank that the bank has received for deposit a sum of money or funds.”
[Last updated in February of 2024 by the Wex Definitions Team]