A simple promissory note is a basic agreement between a maker and payee, specifying repayment of a loaned amount by a certain date. They are usually used for smaller loans between friends and family, and can be secured or unsecured. Downloadable samples are available online.
A simple promissory note is a basic agreement between two parties, called the maker and payee. The manufacturer will repay a specified amount of money to the payee or lender, on or before a specified date, or upon receipt of a request from the payee to do so. This differentiates it from a simple promissory note, which does not specify a period of time for the repayment of the loaned amount. A simple promissory note is usually for a smaller amount of money and usually only requires very basic information.
Most simple promissory notes, called promissory notes in the accounting world, are used between friends, family, and for smaller business loans managed by banks. They are a basic, minimal agreement that typically includes at least the principal amount of the loan, any interest that will be added, and the date the loan is due to be paid back. Most promissory notes will also add other pertinent information, such as addresses and social security or driver’s license numbers. Some will include additional conditions, such as what would happen if the manufacturer died or what would happen in the event of a default. Regardless of the information added, both parties must sign for it to be binding.
Like loans, simple notes can be secured or unsecured. Secured notes will include some type of property put up as collateral and are most often used in less personal business deals. Unsecured notes do not have this requirement, and are most often seen among family or friends. In either case, both secured and unsecured simple notes are considered legal contracts if properly completed.
The origin of the simple promissory note dates back several thousand years. Not much has changed in that time, except perhaps for the addition of the manufacturer’s and possibly the recipient’s address and other unique identifying information. Throughout history, the simple promissory note has even been used in some countries and jurisdictions as legal tender, although it is not very common today.
One advantage that is not the ease of using a simple promissory note is the availability of downloadable samples. Many legal sites have sample documents that are very basic or specific to a local jurisdiction. Most downloads are free, although if you want a more specific note it may cost a small fee. When lending money, even among friends and family, there’s no reason not to sign a simple promissory note. You can avoid confusion, anger, and possible legal expenses.
Smart Asset.
Protect your devices with Threat Protection by NordVPN
