demand note
C2Formal, Technical (Finance/Law)
Definition
Meaning
A promissory note that is payable immediately upon demand by the lender.
A formal, written financial instrument representing a debt that becomes due whenever the holder requests payment. It does not have a fixed maturity date.
Linguistics
Semantic Notes
A 'demand note' is a specific type of promissory note. Its key semantic feature is the lack of a fixed repayment date, distinguishing it from notes with scheduled payments.
Dialectal Variation
British vs American Usage
Differences
The term is standard and functionally identical in both varieties; it is a precise legal/financial term. The format and legal enforceability may differ according to local jurisdictions.
Connotations
Conveys formal financial obligation and immediate liability. In both varieties, it suggests a creditor has significant power to call in the debt.
Frequency
Low frequency in general language but standard within legal, banking, and accounting contexts in both regions.
Vocabulary
Collocations
Grammar
Valency Patterns
The company issued a demand note.The bank called in the demand note.The loan was secured by a demand note.Vocabulary
Synonyms
Strong
Neutral
Weak
Vocabulary
Antonyms
Phrases
Idioms & Phrases
- “On a demand footing”
Usage
Context Usage
Business
Used in corporate finance for short-term loans between entities, providing flexibility to the lender.
Academic
Studied in law and finance courses as an example of negotiable instruments and debt contracts.
Everyday
Rarely used; most people encounter it in formal loan documents or legal disputes.
Technical
A precise instrument in accounting (liability) and law (enforceable contract).
Examples
By Part of Speech
verb
British English
- The bank can demand repayment under the terms of the note.
American English
- The lender demanded payment immediately per the note.
adverb
British English
- The loan was repayable demand-note.
American English
- The funds were advanced on a demand-note basis.
adjective
British English
- The demand-note facility gave the lender great flexibility.
American English
- They had a demand-note arrangement for the bridge loan.
Examples
By CEFR Level
- The contract included a demand note for the borrowed money.
- The investor held a demand note, allowing her to request full repayment at any time.
- To secure the short-term financing, the subsidiary issued a demand note to its parent company, creating a contingent liability on its balance sheet.
Learning
Memory Aids
Mnemonic
Think: a note from your creditor that says 'I demand payment NOW'—it's in the name.
Conceptual Metaphor
DEBT IS A BURDEN THAT CAN BE CALLED BACK. The 'demand' activates the immediate return of the burden.
Watch out
Common Pitfalls
Translation Traps (for Russian speakers)
- Не переводите дословно как "требовательная записка".
- Это юридический термин: "вексель до востребования" или "долговая расписка с правом требования платежа в любое время".
Common Mistakes
- Using 'demand note' to refer to any invoice or bill (it's a specific debt instrument).
- Confusing it with a 'promissory note' that has a fixed date (a demand note has no fixed date).
Practice
Quiz
What is the defining characteristic of a demand note?
FAQ
Frequently Asked Questions
Not exactly. An IOU is an informal acknowledgment of debt. A demand note is a more formal, negotiable instrument that meets specific legal criteria and is payable on demand.
Typically the lender, as it provides maximum flexibility and control over when the debt is repaid, which can create uncertainty for the borrower.
Yes, a demand note can specify an interest rate that accrues until the note is presented for payment and settled.
They are often used for short-term inter-company loans, personal loans between individuals where flexibility is desired, and as security for other obligations.