Payable on demand refers to to a note payable at any time a request
to pay is made. The Uniform Commercial Code, which has been adopted in
some form by nearly all states, provides:
" PAYABLE ON DEMAND OR AT DEFINITE TIME.
- A promise or order is "payable on demand" if
it (i) states that it is payable on demand or at sight, or otherwise indicates
that it is payable at the will of the holder, or (ii) does not state any
time of payment.
- A promise or order is "payable at a definite
time" if it is payable on elapse of a definite period of time after sight
or acceptance or at a fixed date or dates or at a time or times readily
ascertainable at the time the promise or order is issued, subject to rights
of (i) prepayment, (ii) acceleration, (iii) extension at the option of
the holder, or (iv) extension to a further definite time at the option
of the maker or acceptor or automatically upon or after a specified act
or event.
- If an instrument, payable at a fixed date,
is also payable upon demand made before the fixed date, the instrument
is payable on demand until the fixed date and, if demand for payment is
not made before that date, becomes payable at a definite time on the fixed
date."
