Future Business Leaders of America (FBLA) Business Law Practice Exam

Who receives the promise made in a note?

1. Debtor

2. Payee

3. Guarantor

4. Obligor

The correct answer is: Payee

The promise made in a note is received by the payee. In the context of a note, the payee is the person or entity to whom the payment is to be made. This is a crucial role in financial transactions, as the payee is the one expecting to receive the funds stipulated in the note. When a borrower (debtor) issues a note, they formally agree to pay a specified sum to the payee under the terms stated in the note. This establishes a legal obligation for the debtor to fulfill their financial commitment to the payee. The payee might be a lender, a business, or any individual who is entitled to receive payment according to the terms of the note. While other roles such as the debtor, guarantor, and obligor can be important in different contexts, they do not receive the promise provided in the note. The debtor is the one who must make the payment, the guarantor is someone who promises to fulfill the obligation if the debtor cannot, and the obligor is typically a party who has the obligation to pay.