A promissory note (“Note”) is an agreement to pay money on specified terms. Several things must be included in the Note to make it enforceable, such as being in writing and being signed by the party to be held liable for payment. Other things should be included to make the note more effective and easier to enforce.
Besides the payment terms, a Note should include an acceleration clause, a provision for payment of interest, an excellent provision for payment of attorneys’ fees, certain waivers, and a clear identification of the person or persons who may be liable for payment. Any collateral to be held as security for payment of the Note should be specifically identified and may have to be the subject of additional documents in order to be effective. Notes are negotiable instruments, which is a subject unto itself.
If the amount of money exceeds $1,000.00 it may be wise to have an attorney draft the Note. If the Note is to be used for more than one or two transactions, it may be advisable to have an attorney draft a form of Note to be used.
If you have a Note and need help getting it collected, contact us.