Which statement accurately describes a promissory note?

A promissory note is indeed a negotiable instrument that can be enforced, making it a legally binding agreement in which one party (the maker) promises to pay a specified sum of money to another party (the payee) at a defined time or upon demand. This characteristic is crucial because it enables the payee to transfer the note to another party, thereby allowing the promise of payment to be assigned or sold. This transferability is central to the function of negotiable instruments, as it facilitates commerce and credit.

The enforceability of the promissory note means that if the maker fails to comply with the repayment terms, the payee—or any subsequent holder of the note—can pursue legal action to recover the owed amount. This enforceable nature provides security to lenders, which is a fundamental aspect of financial transactions involving promissory notes.

In contrast, the other options describe characteristics that do not align with the definition of a promissory note. For instance, the notion that a promissory note is a non-negotiable contract or cannot be transferred is inaccurate, as these are defining features of negotiable instruments. Similarly, the statement about outlining the legal title of a property misrepresents the function of a promissory