Sign a promissory note online

What a promissory note is

A promissory note is a written, unconditional promise by one person, the maker, to pay a fixed sum to another, the payee, on demand or on a set date. It is shorter than a loan agreement: often a single page with the amount, interest, maturity and the maker's signature.

What sets a note apart is that, if it meets the legal requirements, it is a negotiable instrument. The payee can transfer it to someone else, who may then be able to enforce it free of certain defences the maker had against the original payee. That transferability is what lenders and investors value, and it is also why the law treats notes differently.

E-signature laws often exclude negotiable instruments

In the US, the ESIGN Act and UETA both exclude transactions governed by the Uniform Commercial Code other than Articles 2 and 2A, and promissory notes fall under Article 3. An e-signed note can still be evidence of a debt as a contract, but whether it is a negotiable instrument is doubtful. UETA section 16 and ESIGN section 7021 create 'transferable records', but only for notes secured by real property and only where a system reliably establishes who controls the single authoritative copy. US mortgage lenders use specialised eNote vaults and registries for this. Sign PDF is not one.

Elsewhere: India's Information Technology Act 2000 excludes negotiable instruments other than cheques from its electronic records provisions. In England and Wales, the Electronic Trade Documents Act 2023 allows electronic promissory notes and bills of exchange, but only through a 'reliable system' that gives exclusive control and allows transfer, which an ordinary e-signature platform does not provide. Other countries vary. This is general information, not legal advice.

When Sign PDF is still a sensible choice

Many 'promissory notes' are really simple IOUs between friends, family or a small business and its owner, never meant to be sold or transferred. For those, what matters is clear evidence that the maker promised to pay, and an e-signed document with a certificate showing who signed and when is good evidence of that.

If the note will be sold, pledged to a bank, used in a mortgage transaction or form part of a regulated lending business, use the process your lawyer or lender specifies, which may mean ink and an original, or a dedicated eNote system.

What to include in the note

Keep the promise unconditional. A note that says 'payable if the project succeeds' is unlikely to be negotiable anywhere.

• Names of maker and payee.
• Principal amount, in words and figures.
• Interest rate, and default interest if payments are late.
• Maturity date, or 'on demand'.
• Instalments, if any.
• Acceleration: the whole balance becomes due on a default.
• Governing law and any security.

Sending a note through Sign PDF

Upload the note and Sign PDF places the 'Maker' signature and date. Add a co-maker or guarantor as further signers. The payee does not have to sign a note, but some like to acknowledge receipt.

Signers confirm a code from their email and sign in the browser. The sealed PDF carries a certificate of completion with each signer's details and a DigiCert timestamp. Remember that a sealed PDF can be copied, so there is no single 'original' in the way a paper note has one.