Legal Definitions - approved indorsed note

An approved indorsed note is a type of promissory note that has been endorsed by a third party to provide additional security. A promissory note is a written promise by one party to pay money to another party or to bearer. It is a two-party negotiable instrument, unlike a draft which is a three-party instrument.

For example, if John owes money to Jane, he can give her a promissory note stating that he will pay her back by a certain date. If Jane wants additional security, she can have a third party, such as a bank, endorse the note. This means that the bank is also liable for the payment if John fails to pay.

Other types of promissory notes include:

• Accommodation note: A note that an accommodating party has signed and thereby assumed secondary liability for.
• Balloon note: A note requiring small periodic payments but a very large final payment.
• Demand note: A note payable whenever the creditor wants to be paid.
• Mortgage note: A note evidencing a loan for which real property has been offered as security.
• Unsecured note: A note not backed by collateral.

These examples illustrate the different types of promissory notes that exist and the various ways in which they can be used to secure a loan or debt. It is important to understand the terms and conditions of a promissory note before signing or endorsing it.