What is Difference between cheque and promissory note?

Answer 1

The following are the main differences between a Bill of Exchange and a Promissory Note:

1. A Bill of Exchange is an unconditional order to pay money, whereas a promissory note is an unconditional undertaking or promise to pay money to a certain person.
2. In a Bill of Exchange, there are three parties, viz., the drawer, the drawee and the payee. In a Promissory Note, there are only two parties, viz., the Maker and the Payee.
3. In case of usance (Time) bill, acceptance of the bill is necessary, whereas in a promissory note no such acceptance is required.
4. While foreign bill of exchange is drawn in sets of three, foreign promissory note requires no such sets.
5. In case a foreign bill of exchange is is dishonoured, protesting is compulsory. But when a foreign promissory note is dishonoured, no protesting is required.
6. In case a bill of exchange is dishonoured, a notice of dishonour is required to be given by the holder to the maker of the bill (= drawer). However, in case a promissory note is dishonoured, no notice of dishonour is required to be given by the holder of the maker of the promissory instrument.
7. The liability of the drawer (= maker) of a bill of exchange is secondary, whereas, the liability of the maker of a promissory note is primary.
8. A bill of exchange is drawn for financing trade, whereas, the liability of the maker of is a promissory note is primary.
9. When a bill of exchange is made payable to the bearer, it is not considered as illegal. But a Promissory Note, which does not contain the payee's name, but states that it is payable to bearer, it becomes illegal.
10. In a bill of exchange, the drawee can put conditions subject he will accept the bill. but in a promissory note a maker cannot put any conditions on it.

M.J. SUBRAMANYAM, BANGALORE

Answer 2

All shcks are promissory nots, not all notes are checks. The difference is simply the forms.

==Clarification==

A check (cheque) is a draft signed by the maker, drawn on a bank, payable on demand for a specified sum of money.

A promissory note is an unconditional written promise, signed by the maker, to pay a certain sum of money to the bearer.

Both checks and promissory notes are called negotiable instruments.

Answer 3

A bill of exchange is a written order that is issued by either a business or an individual to repay a sum of money without interest. A promissory note is a promise made between payer and borrower with interest accrued. A check is similar to a bill of exchange except the borrower is a bank instead of an individual.

Answer 4

A check is one form a promissary note.