Question

Describe the pattern for the creation, negotiation and presentation of a promissory note under Uniform Commercial Code Article 3?

Answer 1

Promissory note is an instrument (not being a bank note or currency note)

- in writing containing an unconditional undertaking

signed by the maker, to pay a certain sum of money only

a) to a certain person, or

b) to the order of a certain person, or

c) to the bearer of the instrument."

Thus, a promissory note is a written and signed promise to pay a certain sum of money to some person or to his order

In the course of negotiation payee may endorse (ie, transfer) the note to some other person and that other may endorse the note to some other person and so on.

The promise to pay will not be conditional (ie Unconditional) where it depends upon an event which is certain to happen but the exact time of its occurrence is uncertain

Remember that a promissory note cannot be made, able to the maker himself Thus, a note which uns promise to pay myself is not a promissory and hence invalid. However, it would become valid when it is endorsed by the maker. This Because it then becomes payable to bearer endorsed in blank, ar it becomes payable to endorse or his order of endorsed especially.