A promissory note is a negotiable instrument by which the issuer (drawer) unconditionally orders another party (drawee) to pay a certain sum of money to the beneficiary (payee), or the issuer promises to make that payment.
Promissory note is governed by the provisions of the Promissory notes law, which distinguishes between two main types of bills of exchange: drawn and non drawn Promissory notes.
The endorsed promissory note contains the following elements: a designation that it is a promissory note written in the language in which the document is composed ; an unconditional order to pay a certain sum of money; the name of the party who is to make the payment (drawer); an indication of maturity date; the place where the payment is to be executed; the name of the party to whom or on whose order the payment must be made (payee); an indication of the date and place of issuance of the promissory note; the signature of the issuer (drawer).
The promissory note is strictly formal, so an instrument that lacks any of the elements prescribed by law is not valid as an drawn promissory note.
The interest rate must be stated in the promissory note, if this is not done, the provision regarding interest is considered as not written. The interest starts from the date of issuance of the promissory note unless otherwise specified.
If the amount of the bill is written in both words and figures, in case of discrepancy, the amount written in words shall prevail. If the amount of the bill is written multiple times in words or figures, then the smallest amount shall be considered valid.
If there are signatures on the promissory note from individuals who are incapable of being legally bound, or if there are forged signatures or signatures of fictitious persons, or signatures that, for any other reason, do not bind the individuals who signed the bill or on whose behalf it was signed, the obligations of the other signatories remain valid.
The drawer is responsible for the acceptance and payment of the promissory note. They may be released from the acceptance, but any provision by which they exempt themselves from payment is considered as if it were not written.
Regarding the maturity, the promissory note can be issued: at sight; at a certain period after sight; at a certain period after the date of issuance; on a specific date. Promissory note with an undetermined maturity date, as well as promissory notes with multiple maturity dates, are considered void.
A promissory note payable at sight is payable as soon as it is presented. It must be presented for payment within one year from the date of issuance. The drawer may shorten or extend this period. These time limits can be shortened by endorsers.
The drawer may order that the promissory note payable at sight shall not be presented for payment before the specified time. In such a case, the period for presentation begins to run from that specified time.
The maturity of a promissory note payable at a certain period after sight is calculated either from the date of acceptance or from the date of protest. When no protest has been made, as regards the acceptor, it is considered that an undated acceptance was made on the last day of the period prescribed for presentation for acceptance.
When a promissory note is payable on a specific date in a place where a different calendar is in use than the one used in the place of issuance, then the day of maturity is determined according to the calendar used in the place of payment.
When a promissory date is payable on a certain date or a certain period after the date of issuance or sight and it is drawn from one place to another where different calendars are in use, then the date of issuance is adjusted to the corresponding date in the calendar valid at the place of payment, and the maturity is determined accordingly.
A promissory note payable on a specific date or a certain period after the date of issuance or sight must be presented for payment either on the very day of payment or on one of the two business days immediately following it.
A non-drawn promissory note contains: a designation that it is a promissory note , entered in the body of the document in the language in which it is composed; an unconditional promise to pay a certain sum of money; an indication of maturity; the place where the payment is to be executed; the name of the party to whom or on whose order the payment must be made; an indication of the date and place of issuance of the non-endorsed promissory note; the signature of the issuer (drawer).
