note of hand
Definition
Noun: A written and signed promise to pay a specific sum of money to a designated person or to the bearer, either upon demand or at a fixed or determinable future time. It is a formal, unconditional, and negotiable debt instrument.
Usage
A "note of hand" is a formal financial document, synonymous with a promissory note. It is used in contexts of lending, borrowing, and formalizing debt. - It must clearly state the amount of money (the principal), the parties involved (the maker and the payee), and the terms of repayment. - It represents a legally binding obligation for the borrower to repay the lender.
Examples
- The small business secured a loan by issuing a note of hand to the investor.
- He held a note of hand stating that the debt was due in six months.
- The bank required a note of hand as evidence of the personal loan.
Advanced Usage
- To discount a note of hand: A financial practice where a holder sells the note to a bank or other party before its maturity date for an amount less than its face value.
- To protest a note of hand: The formal act of notarizing a dishonored (unpaid) note to legally certify its non-payment.
Variants and Related Words
- Promissory Note: The most common and direct synonym for "note of hand." This term is more frequently used in modern legal and financial language.
- IOU: An informal, written acknowledgment of a debt. An IOU is less formal and may lack the detailed terms and negotiability of a formal note of hand.
- Bill of Exchange: A related but distinct negotiable instrument that orders a third party to pay a fixed sum to the holder. A note of hand is a to pay, while a bill of exchange is an to pay.
Synonyms
- Promissory note
- Negotiable instrument
- Debt instrument
- Written promise to pay
Related Phrases
- To execute a note: To formally sign and issue a promissory note.
- Noteholder: The person or entity in possession of and entitled to payment on the note.
- Maker of the note: The person who signs the note and promises to pay (the borrower).
Noun
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a promise to pay a specified amount on demand or at a certain time
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I had to co-sign his note at the bank
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