J.P. Alexander
Section 87(1) of the Bills of Exchange Act contains the following definition of a �promissory note�:
�A promissory note is an unconditional promise in writing made by one person to another, signed by the maker, and engaging to pay on demand or at a fixed or determinable future time, a sum certain in money, to a specified person or his order, or to bearer.�
There is no definition of �negotiable instrument� in the Bills of Exchange Act. However, it is not disputed that a promissory note is a negotiable instrument.
All of the provisions of the Bills of Exchange Act apply to promissory notes, save for the sections mentioned in s 93(3) of the Act.
As negotiable instruments, they will fall within the prescription period specified in s 11(c) of the Prescription Act.
The elements identified in the above definition are important for recognising a promissory note, and for drafting one. The definition of a promissory note is substantially similar to that of a bill of exchange and the case law on the above elements may be of assistance when drafting a promissory note.