82. Promissory notes

The lesson, step by step

1. Warm-up

   Ask: If you lend someone money, how could you prove later that they promised to pay it back?

2. The idea

   Read:

   A Promissory Note is a written promise by one party to pay a specified sum to another.

   The Maker is the party who binds himself to pay the note by signing his name to it.

   The Payee is the party to whom the payment is promised.

   The Indorser of a note is the person who writes his name across the back of it.

3. Look at the forms

   Read the sample notes in the book aloud. Point out the words "or order" and "or bearer," and read:

   It is essential to a valid promissory note, that it contain the words "value received," and that the sum of money to be paid should be written in words.

4. Days of grace

   Read:

   A note matures on the day that it is legally due.

   then, count the number of days mentioned in the note and 3 more

   SayIn 1880 a borrower got three extra "days of grace" after the date written on the note. Most states have since done away with them.

5. Work an example

   Take the first example on the page: a 60-day note dated June 3, 1872, at 7%. 60 days + 3 days of grace = 63 days, so it is due August 5. Interest on $560.60 for 63 days at 7% is $6.87; the amount is $567.47.

6. Independent practice

   Your student works the other notes on the page: find the day due, then the amount. Use the calendar or the book's table of days.

7. Check and wrap-up

   Check the printed answers. Ask: Who must pay if the maker cannot? (An indorser, unless he wrote "without recourse.")