J.P. AlexanderJesse Alexander
“A promissory note is a promise. A promise is an undertaking to pay and involves more than an acknowledgment of debt with an implied undertaking to pay — . An acknowledgment of debt is not a promissory note but, coupled with an express undertaking to pay, it could be” (FR Malan Malan on Bills of Exchange, Cheques and Promissory Notes 4ed (Durban: Butterworths 2002) at 464 £465).
The key is the wording of the acknowledgment of debt. An acknowledgment of debt must specifically comply with the definition of a promissory note in s 87(1) of the Bills of Exchange Act in order to be a promissory note, which means that it must contain the elements mentioned above.
An acknowledgment of debt will normally comply with most of these elements and very little adjustment is needed to draft a promissory note.
It is thus easy to convert an acknowledgment of debt into a promissory note.
When acting as a creditor, it is advisable when drafting acknowledgments of debt to consider including the elements required for a promissory note. This should obtain for you three extra years before the claim will prescribe.
Printed copy · Anthology Volume 2, page 369
