Promissory note contents

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I have the following queries regarding Promissory Note:

- Can we specify the period of payment like "payable within 15 days from the date of demand"?

- What is the best way to specify partial payments of principal & interest ?

- What safegauards to be taken against fraudulent modification by the holder (like modifying the amount, date of payment, payee etc)?

- Can it be made in duplicate on which both parties sign?

- Can it be printed on Company (Proprietorship) Letterhead or a Stamp Paper? What is the denomination of the stamp paper?

- Can a nominee for the payee be specified?

Replies (1)

Can we specify the period of payment like "payable within 15 days from the date of demand"?

Yes, this can be mentioned.

 

- What is the best way to specify partial payments of principal & interest ?

One approach could be to attach a schedule showing the sequence of payments.

Make sure to affix a rubber stamp to ensure its validity. Further, mention about the

payment schedule on the PN.

 

- What safegauards to be taken against fraudulent modification by the holder (like modifying the amount, date of payment, payee etc)?

Transparent adhesive tape can be used over the words that need to be safeguarded.

 

- Can it be made in duplicate on which both parties sign?

Retaining the basic structure & contents one could raise in duplicate as well.

 

- Can it be printed on Company (Proprietorship) Letterhead or a Stamp Paper?

Ideally, PNs carry their value on a stamp paper. Else, legally they would not have much use.

 

What is the denomination of the stamp paper?

Varies based on the amount for which a PN is raised.

 

- Can a nominee for the payee be specified?

No harm in mentioning the words "or his nominee" on the PN.

 

(have answered based on my experience & understanding)

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