How to write a promissory note: requirements, example and mistakes that void it

A promissory note is a written promise to pay a sum of money to a person on a set date. It's the most common credit instrument among individuals and small businesses in Latin America: loans between acquaintances, installment sales, advances to employees.

Although each country has its own negotiable-instruments law, the essential elements repeat: the words "promissory note" in the text, an unconditional promise to pay a set amount, the name of who gets paid (the payee), the date and place of payment, the date and place of signing, and the signature of whoever undertakes to pay (the maker).

In Mexico, for example, they're listed in the General Law of Negotiable Instruments and Credit Operations. If one is missing, the document may lose its status as a promissory note and stand only as evidence of an ordinary debt.

"PROMISSORY NOTE. By this note I unconditionally promise to pay to the order of [payee], in [place of payment], on [due date], the sum of [amount in figures] ([amount in words]). In case of late payment I will pay interest of [rate] per month. [Place and date of signing]. Maker's name, ID, address and signature."

Writing the amount in figures and in words avoids disputes: if they don't match, the amount in words generally prevails.

Leaving blanks someone else could fill in. Adding conditions ("I'll pay if the goods are delivered"): a promissory note must be unconditional. Forgetting the due date or the place of payment. Crossed-out corrections that aren't initialed. And not keeping a signed copy for the debtor.

Signed electronically, the note proves the debt exists, who accepted it and when — very valuable in a dispute. But note: as a negotiable instrument, to collect it through expedited court proceedings many courts still ask for the original paper document. If you think you might have to collect it in court, ask a lawyer in your country which format suits you.

For loans between acquaintances, installment sales and payment agreements, signing electronically avoids having to meet and leaves a clear record. Firmiu's paid plans include promissory note and payment agreement templates that generate the document from the details you fill in.