Last Updated: August 22 2026
What is the difference between a promissory note and a demand note under Ontario law?
A promissory note is an unconditional written promise by one party to pay another a specific sum of money at a fixed or determinable future time, and it can include terms like the interest rate and repayment conditions; a demand note is simply a promissory note with no fixed due date, meaning the amount becomes payable when the lender makes a demand. Under the Bills of Exchange Act, R.S.C. 1985, c. B-4, s. 176(1), a promissory note is defined as an unconditional promise in writing signed by the maker to pay on demand or at a fixed or determinable future time a sum certain in money to a specified person or bearer. If you need to draft or review a note, confirm whether it is truly payable on demand, or assess your rights and next steps for collecting repayment, Olson Craig Legal can help with lawyer and paralegal support across Ontario; call (226) 886-2001 to discuss your situation.
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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 Olson Craig Legal by phone at: (226) 886-2001 to discuss any specific questions that you may have.
The Law
The Bills of Exchange Act, R.S.C. 1985, c. B-4, governs financial instruments such as currency, cheques, among other things, and 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
A promissory note will typically include details of the principal amount due, the applicable interest rate, the parties involved including a "bearer of note" if a party is unspecified, the date of issue, the repayment terms, and the due date.
Payable Upon Demand
Demand notes are promissory notes without a specific due date as such a note becomes due upon demand of payment.
Summary Comment
A promissory note is a negotiable instrument and could consist as a cheque, loan agreement, or other document evidencing indebtedness.
NOTE: A significant number of inquiries related to “lawyers near me” or “best lawyer in” typically signify a pressing need for competent legal assistance instead of a specific job designation. In Ontario, licensed paralegals are governed by the same Law Society that regulates lawyers and are permitted to represent clients in specific litigation cases. Advocacy, legal assessment, and procedural expertise are fundamental to this position. Olson Craig Legal provides legal representation within its licensed framework, focusing on strategic positioning, evidence preparation, and effective advocacy aimed at securing prompt and advantageous outcomes for clients.
