Promissory Notes:

Question: What is the difference between a promissory note and a demand note, and how can a Paralegal in Ontario help me respond if I receive one that I think is invalid?

Answer: ?

Answer: A promissory note is an unconditional written promise signed by the maker to pay a certain sum to a specified person or to bearer either on demand or at a fixed or determinable future time under terms like principal, interest, and repayment details, while a demand note is a type of promissory note that has no fixed due date and becomes payable when payment is requested.

Answer: ?

Answer: ?

Answer: > Between sentences:   Vagans Legal (Vagans Legal) can help you understand what your document requires, identify whether the wording and signing meet the definition of a promissory note under the Bills of Exchange Act, R.S.C. 1985, c. B-4, help you respond to a demand appropriately, and review next steps in Ontario to protect your rights as a borrower or payor; call (416) 473-8472 for paralegal support across Ontario.

Understanding What Constitutes As a Promissory Note and What Is Meant By a Demand Note Versus a Common Note

A promissory note is a form of negotiable instrument whereby a party (the issuer) makes an unconditional promise in writing to pay a sum of money to another party (the payee).  Payment becomes due under a promissory note at fixed time stated within the promissory note or upon receipt of a demand for repayment. A promissory note will also contain details of any applicable terms such as a rate of accruing interest, if any.

The Law

The Bills of Exchange Act, R.S.C. 1985, c. B-4, governs financial instruments such as currency, cheques, among other things, and defines a promissory note as:

A promissory note is a contract between two parties, the borrower and the lender.  A bank note is a type of promissory note issued by a bank or other financial institution.  In either circumstance, a promissory note is a written promise to pay a certain amount of money to a specific person or a specific entity at a specific time and under certain conditions.  However, unlike a promissory note, a bank note is backed by the assets of a bank and is therefore more secure.

Terms Upon Notes

A promissory note will typically include details of the principal amount due, the applicable interest rate, the parties involved including a "bearer of note" if a party is unspecified, the date of issue, the repayment terms, and the due date.

Payable Upon Demand

Demand notes are a type of promissory note but differ whereas a demand note lacks a specified due date and instead becomes due upon request of payment.

Summary Comment

A promissory note is a legal document that states a promise to pay a certain amount of money. A promissory note may take the form of a cheque, loan agreement, or other document, that serves as proof of an outstanding debt.