difference between cheque and promissory note

Difference between cheque and promissory note

We can distinguish between cheque and promissory note by the following facts :

1. Order And Promise :-

Cheque : It contains order to pay.

Promissory note : A promissory note contains promise to pay.



2. Number Of Parties :-

Cheque : In case of cheque there may be three parties, the drawer, drawee and payee.

Promissory note : In case of promissory note are only two parties, the maker and the payee.



3. Object :-

Cheque : Cheque is used because it is a simple and easy medium of exchange and serving of metalic money.

Promissory note : It is used for receiving and giving credit.



4. Crossing :-

Cheque : A cheque may be crossed.

Promissory note : A pro-note cannot be crossed.



5. Payable To Bearer :-

Cheque : A cheque is often drawn as payable to bearer.

Promissory note : A pro-note cannot be drawn payable to bearer.



6. Stop Payment :-

Cheque : Its payment can be stopped by giving the notice to the bank.

Promissory note : A pro-note payment can not be stopped if once issued.



7. Liability Nature :-

Cheque : In case of cheque when it is dishonoured, the drawer is liable.

Promissory note : In case of promissory note liability is primary.



8. Use Of Form :-

Cheque : It is drawn on a printed form issued by a particular bank.

Promissory note : Promissory note may be drawn on any paper and there is no need of any particular form.



9. Drawee :-

Cheque : A cheque is always drawn to a particular bank where account is available.

Promissory note : A promissory note can be drawn on any person.



10. Drawer and Payee :-

Cheque : In case of cheque drawee and payee can be the same person.

Promissory note : In case of pro-note there are two parties and maker cannot be the payee.