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Promissory Note Fill out the template

Promissory Note

Last revision
Last revision 21/07/2023
Formats Word and PDF
Size 1 page
Rating 4.7 - 10 votes
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Last revisionLast revision: 21/07/2023

FormatsAvailable formats: Word and PDF

SizeSize: 1 page

Option: Help from a lawyer

Rating: 4.7 - 10 votes

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Promissory Note

This document is a promissory note which can be used for repayment of simple loans or credit either between individuals or companies in the United Kingdom. It acts as an I.O.U. or signed letter confirming a debt and promising repayment.

The document can be tailored to allow for different repayment options including fixed instalments, repayment by a set date, repayment on demand or any other custom schedule of payments.

It can also provide for simple terms charging interest on the outstanding debt, or securing the debt (i.e as a charge where an item of property has been provided to be sold in the event that the borrower cannot repay).

This document should be used for short term, less complex, one-off loans or offers of credit for goods supplied. For more complex loans/offers of credit, a full loan agreement should be used.

How to use this document

In order to form a legal agreement, the document should be signed by the person(s) or company borrowing the funds. The lender should keep the original safe, but it is advised to retain copies so that all parties can be clear about the terms of the promise to repay.

If the document is being signed by a company, the company should have a manager, director or company secretary to sign it, and should include at least two such signatures unless the company has only one person. Each signature should also be dated and outline the signors name and role in the company. This process should be checked against any specific requirements outlined in the company's documentation/articles.

If the loan is to be repaid on demand, the lender should notify the borrower that payment is required in writing to the address specified in the document, and present the signed original document to the borrower.

If the loan is to be paid by instalments or on a fixed date, the document should be presented as above if the loan is not repaid in time, or if any payments due are missed. The lender may wish to send a letter of demand to accompany the reminder of the promissory note.

Finally, if an item of property is to be provided as security for the loan or credit, that item or documents concerning its title should be given to the lender with the document. It should be noted that if there are then any missed payments that item may be sold by the lender to recover the value of the loan or credit.

Relevant law

The law applicable in to Promissory Notes in the United Kingdom can be found in the Bills of Exchange Act 1882.

Section 5 of the Limitation Act 1980 deals with the time limit within which a simple contractual agreement can be enforced in England and Wales. Usually, in such cases it will be a six year time limit.

Section 6 and Schedule 1 of the he Prescriptions and Limitation (Scotland) Act 1973, deals with the time limit within which a promissory note can be enforced in Scotland. Usually, in such cases it will be a five year time limit.

Section 4 of the Limitation (Northern Ireland) Order 1989 deals with the time limit within which a simple contractual agreement can be enforced in Northern Ireland. Usually, in such cases it will be a six year time limit.

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