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A promissory note is often used in similar trade finance situations to a bill of exchange (see Practice Note: Introductory guide to unstructured trade finance), with the principal difference being that a bill of exchange is an order to pay (usually the drawer ordering the drawee to pay the payee), while a promissory note is a promise to pay (the maker of the note promising to pay the payee). For more information on bills of exchange, see Practice Note: Bills of exchange—structure and parties. Both bills of exchange and promissory notes are governed by detailed provisions of the Bills of Exchange Act 1882 (BEA 1882). When construing the BEA 1882 with respect to promissory notes, Part II of the BEA 1882 must be considered as it contains certain modifications and exceptions that apply mutatis mutandis to the provisions governing bills of exchange.

BEA 1882, s 83(1) provides that a promissory note is:

'…an unconditional promise in writing made by one person to another signed by the maker, engaging to pay, on demand or at a fixed