A promissory note is a contract that has a borrower sign in writing, their promise to pay what they owe to the third party. They can be used by any party who wishes to have the commitment in writing so they can use it in the future if problems arise between the two parties and payment is not paid.
Promissory notes are used in many situations but are most often used by lenders when borrowing money. In almost any case where you borrow money from a financial institution, they will require that you sign a promissory note to have your commitment in writing. However, anybody can have a promissory note created if they are owed money and concerned about its payment. There are many ways to create a promissory note but, if you are the borrower, it is important to know and understand everything that the note says. If you have any questions about a promissory note, contact a lawyer to go over it with you before signing.