Last Updated: August 22 2026
Is a demand note the same as a promissory note, and when can a lender demand payment in Ontario?
In Ontario, a promissory note is an unconditional written promise to pay a specified sum to a named person or bearer on demand or at a fixed or determinable future time, while a demand note is a promissory note with no fixed due date and becomes payable when the issuer makes a payment request. Under Bills of Exchange Act, R.S.C. 1985, c. B-4, the note must be a signed, written promise to pay a sum certain on demand or at a set time, and typical terms include principal, interest (if any), parties, issue date, and repayment terms. If you are dealing with a note you received or issued, SFG Paralegal Services LLP can help a paralegal review the wording and payment demand to explain your options and next steps; call (888) 398-0121 for guidance in Ontario.
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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 SFG Paralegal Services LLP by phone at: (888) 398-0121 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. A bank note is a type of promissory note issued by a bank or other financial institution. In either circumstance, a promissory note is a written promise to pay a certain amount of money to a specific person or a specific entity at a specific time and under certain conditions. However, unlike a promissory note, a bank note is backed by the assets of a bank and is therefore more secure.
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.
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