Definition
A written memorandum given by a broker to the buyer of merchandise after completing a sale on the buyer's behalf, confirming the fact of the transaction and specifying the essential terms: the goods sold, quantity, price, and related particulars. The sold note is issued by the broker in the capacity of agent and serves as the buyer's record of the completed transaction.
In broker-mediated sales, the transaction typically generates two complementary documents: the sold note, delivered to the buyer, and the bought note, delivered to the seller. Together, these instruments constitute the broker's record of the deal and may serve as evidence of the contract between buyer and seller.
Common Confusion
The sold note and the bought note are frequently confused or conflated, and historical sources compound the problem by using the names inconsistently. Bouvier's explicitly flags this: "Some confusion may be found in the books as to the name of these notes: they are sometimes called bought notes." The distinction tracks the recipient, not the transaction. The sold note goes to the buyer (confirming what was sold to them); the bought note goes to the seller (confirming what the broker bought on the seller's behalf). A researcher encountering either term in historical sources should not assume consistent usage and should examine context carefully to determine which party received the document in question.
SOLD NOTE is distinct from a promissory note. Despite sharing the word "note," a sold note is not a negotiable instrument or an instrument of indebtedness. It is a written confirmation of a completed sale — closer in function to a contract memorandum than to a bill or note in the commercial law sense.
Why It Matters in Research
The sold note surfaces primarily in agency law and commercial practice materials from the eighteenth and nineteenth centuries, when broker-mediated commodity sales were common and the legal status of broker-issued memoranda was actively litigated. Researchers will most often encounter the term in treatises on agency — Story's Commentaries on the Law of Agency being the canonical reference — rather than in statutory codes or modern case law.
Several research traps apply:
First, terminology instability. As Bouvier's warns, historical sources do not use "sold note" and "bought note" consistently. The same document may be called by either name depending on the author, jurisdiction, or date of the source. When reading nineteenth-century commercial or agency materials, treat the name as a starting point, not a reliable designator.
Second, the term does not map cleanly onto modern commercial law vocabulary. Modern researchers looking for analogues should think in terms of trade confirmations, broker confirmations, or sale memoranda under the Statute of Frauds — not negotiable instruments. The sold note's legal function was to satisfy writing requirements and establish the terms of the brokered contract, not to circulate as a payment instrument.
Third, the sold note is entangled with questions of broker authority and the formation of the underlying contract. Cases involving sold notes often turn on whether the broker had authority to bind the principal, and whether the memorandum itself constituted a sufficient writing to enforce the agreement. Researchers pursuing these questions should connect sold note materials to the broader agency law corpus, particularly the chapters on broker authority and the statute of frauds in commercial contexts.
Fourth, jurisdictional practice varied. English commercial practice — especially in the commodity and shipping trades — generated the bulk of the doctrinal development, and American courts frequently cited English authorities. Researchers working on American cases should trace the English origins of the doctrine before assuming domestic consistency.
Historical Dictionary Support
The historical dictionaries converge on the core definition with little variation: a sold note is a memorandum issued by a broker to the buyer, recording the completed sale. All sources trace the doctrine to Story on Agency § 28, which is the foundational American treatise citation on this point.
Black's first edition gives the spare definition. Black's second edition adds the citation to Saladin v. Mitchell, 45 Ill. 83, which is the only case citation appearing in the historical dictionary record for this term — a useful entry point for researchers needing judicial treatment.
Rapalje & Lawrence redirect the reader to "BOUGHT AND SOLD," signaling that the two instruments were treated as a paired doctrinal unit in the practice literature, not as entirely separate concepts.
Bouvier's is the most informative of the historical sources, explicitly acknowledging the naming confusion and situating the sold note within broker practice. The entry also touches on the related statutory phrase "sold or removed for sale" in a 1914 excise tax context, which is an entirely separate usage requiring no confusion with the broker's instrument.
Burrill's adds nothing to the definition beyond the other sources, though it usefully confirms the term's association with Story's agency treatise. Burrill's entry for SOLDARIUS (a medieval Latin term for soldier) immediately follows, sharing no connection to sold note.
What the historical dictionaries collectively omit: they do not address the legal consequences when sold note and bought note terms conflict, the evidentiary weight of the sold note in dispute resolution, or the instrument's relationship to Statute of Frauds requirements — all of which were live questions in nineteenth-century litigation.
Encyclopedia Cross-Reference
The Law Mind Contracts & Commercial Law Encyclopedia: Negotiable Instruments — Types (Notes, Drafts, Checks, Certificates of Deposit) [contracts_151] — for the distinction between the sold note and instruments of indebtedness.
The Law Mind Business Organizations & Corporate Law Encyclopedia: Corporate Finance — Debt Securities (Bonds, Debentures, Notes) [business_72] — for broader context on what qualifies as a "note" in commercial law.