Which of the following is not a requisite of a negotiable promissory note?

Which of the following is not a requisite of a negotiable promissory note?

• A. It must be in writing and signed by the maker.
• B. It must contain an unconditional promise to pay a certain sum of money.
• C. It must be payable on demand or at a fixed time or at a determinable future time.
• D. It must be payable to order or to bearer.

Answer: (B)

A negotiable promissory note must satisfy several requirements: it must be in writing and signed by the maker; it must contain an unconditional promise to pay a sum of money; it must be payable on demand or at a fixed time or at a determinable future time; and it must be payable to order or to bearer. The unconditional promise to pay a definite amount is essential—any condition attached to the payment would prevent the instrument from meeting negotiability standards. Therefore, all four listed items are true requisites; none is actually a non-requisite. If a question asks for a non-requisite, that would indicate a flaw in the item. For contrast, a note that promises to pay $1,000 to Jane on December 31, 20XX is negotiable, while a note promising to pay $1,000 to Jane if X happens is not negotiable because it’s conditional.

A negotiable promissory note must satisfy several requirements: it must be in writing and signed by the maker; it must contain an unconditional promise to pay a sum of money; it must be payable on demand or at a fixed time or at a determinable future time; and it must be payable to order or to bearer. The unconditional promise to pay a definite amount is essential—any condition attached to the payment would prevent the instrument from meeting negotiability standards. Therefore, all four listed items are true requisites; none is actually a non-requisite. If a question asks for a non-requisite, that would indicate a flaw in the item. For contrast, a note that promises to pay $1,000 to Jane on December 31, 20XX is negotiable, while a note promising to pay $1,000 to Jane if X happens is not negotiable because it’s conditional.