PROMISSORY NOTE

short-term credit instrument consisting of a written promise by one person (maker) to pay a specified amount of money to another on demand or at a given future date. Promissory notes are often negotiable and may be secured by the pledge of collateral. Promissory notes were in use in Europe during the Renaissance. The instrument has changed substantially during the 20th century, both in form and use; clauses have been added, including those that authorize the sale of collateral, permit extensions of time, and permit acceleration of payment in event of default.