Legal Definitions - post note

A post note is a financial instrument, similar to a banknote or a promissory note, that specifies a future date for payment. Unlike a standard banknote or a check that can be cashed immediately upon presentation (on demand), a post note cannot be redeemed or paid until the specified future date arrives. It represents a promise to pay a certain sum of money at a later, agreed-upon time, effectively deferring the payment.

• Example 1: Business Transaction

  A small software development firm, "CodeCrafters," purchases new server equipment from a hardware supplier, "DataStream Solutions." Instead of paying the full amount of $20,000 immediately, CodeCrafters issues a document to DataStream Solutions stating that the payment will be made in 45 days. This document serves as a post note, allowing CodeCrafters to defer the payment until the specified future date.

  This illustrates a post note because the payment for the server equipment is not due "on demand" (immediately) but rather at a clearly defined "future time" (45 days from now). DataStream Solutions cannot redeem or collect on this note until that future date.

• Example 2: Construction Project Financing

  A general contractor, "BuildRight Construction," needs to procure specialized materials from a vendor, "StrongFound Supplies," for a large commercial building project. To manage cash flow, BuildRight issues a note to StrongFound promising to pay $50,000 for the materials upon the completion of the building's structural framework, which is projected to be four months away.

  Here, the note issued by BuildRight is a post note because the payment is contingent upon a future event (completion of the structural framework) and a future estimated time (four months), rather than being payable immediately upon the materials' delivery. StrongFound Supplies holds a promise of future payment, not an immediate claim.

• Example 3: Agricultural Supply Chain

  A large food distributor, "HarvestLink," buys a significant harvest of seasonal produce from a farming cooperative, "Green Acres Growers." Due to the perishable nature of the goods and the time required for processing and distribution, HarvestLink issues a note to Green Acres promising to pay the total amount of $30,000 in 60 days, after the produce has been delivered to retailers and initial sales have occurred.

  This scenario demonstrates a post note because the payment for the produce is scheduled for a specific "future time" (60 days) rather than being due "on demand" at the point of harvest or initial delivery. Green Acres Growers must wait until that future date to receive the funds.