Promissory Note Legal Meaning and Definition

Here is a simplified definition of the legal term Promissory Note.

Promissory Note (noun): A legal document in which one party (the issuer) promises in writing to pay a determinate sum of money to the other (the payee), either at a fixed or determinable future time or on demand of the payee, under specific terms. These terms can include interest payments, installment arrangements, penalties for late payment, and provisions for legal fees should legal action become necessary.