Contract Notes, also called BOUGHT AND SOLD NOTES, or ADVICE NOTES, are notes of a purchase or sale signed by a broker, and delivered to his principals, by which the bargain through him is completed. They are used by all kinds of brokers, and the following is the form of a stockbroker's contract and note:
2 OLD BROAD STREET, LONDON, 20th December 1888.
BOUGHT by order and on account of A. B., Esq. (subject to the rules and regulations of the London Stock Exchange),
20 London Street Tramway Shares, at £16.....£320 0 0
Brokerage..... I 12 0
C. D. & Co.,
Sworn Brokers. £321 12 0
These notes are, in fact, transcripts from books in which it is the practice of brokers to enter or register their transactions. The bought notes and the sold notes are respectively delivered to the principal parties; and as they contain the essential parts of the bargain, they will suffice as evidence, in the absence of a corresponding entry in the broker's books; but if they describe the particulars differently or incorrectly, as one species of goods for another, or erroneously state the terms, no contract arises, and a variation of this nature cannot be corrected by a reference to the broker's book.
In England, such written notes are required by the Statute of Frauds (29 Charles II. chap. 3) to prove a contract; while in Scotland, except in certain cases, any kind of evidence will be admitted in proof (see PAROLE EVIDENCE; see also BROKER, SALE).