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    Question

    Under the Negotiable Instruments Act, 1881, what are the

    essential elements of a valid promissory note as per Section 4?
    A Written promise to pay, named payee, fixed amount, signed by maker Correct Answer Incorrect Answer
    B Unconditional written promise to pay a definite sum, fixed or determinable at a future date, to a specified person or bearer, made by one person to another Correct Answer Incorrect Answer
    C Verbal acknowledgment of debt followed by written confirmation Correct Answer Incorrect Answer
    D Promise with conditions for payment depending on future events Correct Answer Incorrect Answer
    E Mere statement of debt without formal promise to pay Correct Answer Incorrect Answer

    Solution

    Section 4 of the Negotiable Instruments Act, 1881, defines a promissory note as an unconditional written promise to pay a sum of money that is fixed or otherwise determinable. Key requirements: (1) written promise (not oral), (2) unconditional (no conditions precedent), (3) definite sum of money in rupees, (4) at future date or on demand, (5) to a specified person or bearer, (6) signed by maker. If the promise is conditional (e.g., "I promise to pay if goods are delivered"), it is not a promissory note. A promissory note creates primary liability on the maker; the maker promises direct payment, distinguishing it from a bill of exchange requiring presentment.

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