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Promissory note and Parties to a Promissory Note Video Lecture | Accountancy Class 11 - Commerce

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FAQs on Promissory note and Parties to a Promissory Note Video Lecture - Accountancy Class 11 - Commerce

1. What is a promissory note?
Ans. A promissory note is a legally binding document that outlines the terms and conditions of a loan or debt. It serves as a written promise from the borrower to repay the lender a specific amount of money within a specified time frame.
2. Who are the parties involved in a promissory note?
Ans. The parties involved in a promissory note are the borrower, also known as the maker, and the lender, also known as the payee. The borrower is the individual or entity who borrows the money, while the lender is the individual or entity who lends the money.
3. What information should be included in a promissory note?
Ans. A promissory note should include essential information such as the names and contact details of both the borrower and lender, the principal amount of the loan, the interest rate (if applicable), the repayment terms, and any other terms or conditions agreed upon by both parties.
4. Can a promissory note be modified or amended?
Ans. Yes, a promissory note can be modified or amended if both parties agree to the changes. It is essential to document any modifications or amendments in writing and have both parties sign and date the revised promissory note to ensure its legality and enforceability.
5. What happens if the borrower fails to repay the loan as specified in the promissory note?
Ans. If the borrower fails to repay the loan as specified in the promissory note, the lender has the right to take legal action to recover the outstanding amount. This may include filing a lawsuit, obtaining a judgment against the borrower, and pursuing collection efforts such as wage garnishment or asset seizure.
82 videos|105 docs|42 tests
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