Promissory Notes:

Question:What’s the difference between a demand note and a promissory note for unpaid debts in Ontario?

Answer:Civil Litigations Paralegal Services can help you understand whether your document is a promissory note or a demand note, so you know when payment is actually due and what to do next in an Ontario unpaid-debt matter; under the Bills of Exchange Act, R.S.C. 1985, c. B-4, a promissory note is an unconditional written promise to pay a sum certain on demand or at a fixed or determinable future time, signed by the maker.  A demand note is a promissory note without a specified due date, meaning the amount generally becomes payable when the creditor makes a payment request.  If you are dealing with a possible debt claim or need help reviewing the terms like the amount, interest, parties, and repayment timing, contact (416) 229-1479 for paralegal guidance on your next steps.

Add this website to Google Preferred Sources

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

A promissory note is a written document in which one party (the issuer) makes an unconditional promise to pay a certain amount of money to another party (the payor). Under a promissory note, payment is due at the stated time or upon receiving a request for repayment. A promissory note will include information about any applicable terms, such as the rate of interest, if any, that may be accrued.

Note: For immediate help, please contact Civil Litigations Paralegal Services by phone at: (416) 229-1479 to retain services or to discuss any specific questions that you may have.

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, where the borrower agrees to pay a certain amount of money to the lender at a specific time and under certain conditions. A bank note is a type of promissory note issued by a bank or other financial institution; but, it is backed by the assets of the bank which makes a bank note more secure than a regular promissory note.

Terms Upon Notes

Usual terms that may be shown upon a note include the principal amount due, the applicable interest rate, the parties to the note including a party who may be unspecified and simply known as a "bearer of note", the date of issue, the repayment terms, and the due date.

Payable Upon Demand

Demand notes are promissory notes without a specific due date as such a note becomes due upon demand of payment.

Summary Comment

A promissory note is a negotiable instrument and could consist as a cheque, loan agreement, or other document evidencing indebtedness.