A promissory note is a written promise by one person (the maker) to pay a specified sum to another (the payee) either on demand or at a specific date. It is simpler than a loan agreement and functions as a negotiable instrument — it can be transferred to another party.

• Must be unconditional promise to pay a fixed sum
• Can be payable on demand or at a fixed future date
• Negotiable: can be endorsed and transferred to a third party
• Stamp duty: promissory notes were formerly subject to stamp duty — now abolished
• If maker does not pay, payee can sue on the note without proving the underlying debt

Legal reference: Bills of Exchange Act 1882 ss.83-89; Limitation Act 1980 (6-year limitation on simple contract debt)