A promissory note is a written promise that you will pay someone money that you owe them. It usually states the terms and time-frame for payment. Promissory notes are negotiable instruments: If your creditor gives the note to someone else, that person can then claim the debt. The South Carolina Commercial Code spells out the legal requirements for negotiable instruments used in the state.
South Carolina law states that promissory notes and other negotiable instruments must be payable to the bearer, either on demand or at a specific time. A binding legal instrument does not require the debtor provide any service other than paying the money, unless it's to give up any collateral required for nonpayment. If you complete a note but do not deliver it to your creditor, it's still legally binding, though nondelivery can be a defense if the case winds up in court.
If the promissory note contains contradictory terms or it isn't complete, it can still bind you. If the note has any apparent contradictions or corrections, words take precedence over figures and handwritten terms outweigh printed or typed terms. An incomplete typed note can be finished in writing. If one party makes an unauthorized alteration, that discharges the other party's obligations, but it may still be possible to enforce the note under its original terms.
A promissory note can't bind you unless you sign it or your representative signs it, providing you've given him the authority to sign for you. If someone signs in your name who doesn't represent you, you are not usually bound to honor the note. If another party pays value for the note in good faith, however, you might be held to it. A business or other debt that requires more that one person sign for it must have both signatures on the note to be valid.
If someone rewrites the note without your consent or forges your signature, it may still be binding if the bearer can show the fraud resulted from your negligence or that you failed to take adequate precautions against fraud. If the bearer's own negligence results in her being defrauded by the fake, a court may allocate responsibility for the debt between you, depending how much each of you contributed to the problem. The burden of proof varies according to the situation.
A graduate of Oberlin College, Fraser Sherman began writing in 1981. Since then he's researched and written newspaper and magazine stories on city government, court cases, business, real estate and finance, the uses of new technologies and film history. Sherman has worked for more than a decade as a newspaper reporter, and his magazine articles have been published in "Newsweek," "Air & Space," "Backpacker" and "Boys' Life." Sherman is also the author of three film reference books, with a fourth currently under way.