Promissory Notes: Negotiable Instruments Containing Express Terms Regarding Repayment | Caruso Legal Services
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Promissory Notes:

Negotiable Instruments Containing Express Terms Regarding Repayment



Last Updated: July 07 2026

Question: What’s the difference between a promissory note and a demand note in Ontario, and when is a demand note legally due without a fixed due date?

Answer:

In Ontario, a paralegal at Caruso Legal Services can help you understand whether your document is a promissory note or a demand note, and when you may be able to demand payment, because a promissory note is an unconditional written promise to pay a specified sum to a specified person or bearer either on demand or at a fixed or determinable future time, and a demand note is typically a promissory note with no fixed due date so it becomes due when the payee makes a demand.   To determine your next step, gather the original signed document, review the repayment terms, interest terms, and any “on demand” wording, then keep proof of when and how demand was made and whether any payments were credited, since these details can affect enforceability and collection strategy.   If you need clarity on your situation in Ontario, call (289) 271-0488 to discuss how Caruso Legal Services can assist with your promissory note or demand note dispute and help you avoid delays.

Understanding What Constitutes As a Promissory Note and What Is Meant By a Demand Note Versus a Common Note

Promissory Notes: Negotiable Instruments Containing Express Terms Regarding Repayment A promissory note is a form of negotiable instrument whereby a party (the issuer) makes an unconditional promise in writing to pay a sum of money to another party (the payee).  Payment becomes due under a promissory note at fixed time stated within the promissory note or upon receipt of a demand for repayment. A promissory note will also contain details of any applicable terms such as a rate of accruing interest, if any.

The Law

The Bills of Exchange Act, R.S.C. 1985, c. B-4, governs financial instruments such as currency, cheques, among other things, and defines a promissory note as:


176 (1) A promissory note is an unconditional promise in writing made by one person to another person, signed by the maker, engaging to pay, on demand or at a fixed or determinable future time, a sum certain in money to, or to the order of, a specified person or to bearer.

A promissory note is a contract between two parties, the borrower and the lender.  A bank note is a type of promissory note issued by a bank or other financial institution.  In either circumstance, a promissory note is a written promise to pay a certain amount of money to a specific person or a specific entity at a specific time and under certain conditions.  However, unlike a promissory note, a bank note is backed by the assets of a bank and is therefore more secure.

Terms Upon Notes

Usual terms that may be shown upon a note include the principal amount due, the applicable interest rate, the parties to the note including a party who may be unspecified and simply known as a "bearer of note", the date of issue, the repayment terms, and the due date.

Payable Upon Demand

Demand notes are a type of promissory note but differ whereas a demand note lacks a specified due date and instead becomes due upon request of payment.

Summary Comment

A promissory note is a legal document that states a promise to pay a certain amount of money. A promissory note may take the form of a cheque, loan agreement, or other document, that serves as proof of an outstanding debt.

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