Last Updated: August 22 2026
What is the difference between a demand note and a common promissory note in Ontario?
A promissory note is an unconditional written promise to pay a specified sum either at a fixed or determinable future time or on demand, and Canada’s Bills of Exchange Act, R.S.C. 1985, c. B-4, s. 176(1) defines it that way A demand note is still a promissory note, but it has no set due date and becomes payable when the issuer makes a payment demand, while a common (term) promissory note becomes due on the date or timing stated in the document Because wording, signatures, interest terms, and how the note is structured can affect enforceability and next steps, a lawyer at Lo Greco Law with 30+ year experienced lawyer services and LSO tribunal representation can review your document and advise on your options in Ontario, call (416) 488-4110.
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Understanding What Constitutes As a Promissory Note and What Is Meant By a Demand Note Versus a Common Note
A promissory note is a written document in which one party (the issuer) makes an unconditional promise to pay a certain amount of money to another party (the payor). Under a promissory note, payment is due at the stated time or upon receiving a request for repayment. A promissory note will include information about any applicable terms, such as the rate of interest, if any, that may be accrued.
Note: Please contact Lo Greco Law by phone at: (416) 488-4110 to discuss any specific questions that you may have.
The Law
The Bills of Exchange Act, R.S.C. 1985, c. B-4, addresses promissory notes as a form of financial instrument, along with currency, cheques, among other things, and specifically 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, where the borrower agrees to pay a certain amount of money to the lender at a specific time and under certain conditions. A bank note is a type of promissory note issued by a bank or other financial institution; but, it is backed by the assets of the bank which makes a bank note more secure than a regular promissory note.
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 negotiable instrument and could consist as a cheque, loan agreement, or other document evidencing indebtedness.
