subject: How a Simple Promissory Note is Drafted [print this page] How a Simple Promissory Note is Drafted How a Simple Promissory Note is Drafted
A promissory note basically is a written promise that a fixed sum of money will be paid to the person stated on a specified date or whenever there is a demand for the money. A promissory note has two parties; the lender and the borrower. Before the writing of an actual promissory note is discussed, it is essential that people are aware of the points that the note should contain. These points can be realized only if a simple promissory note is drafted.
People often come up with cunning plots so as to alter or modify a promissory note. They even attempt to deny its authenticity. However, if the agreement contains clearly specified points, there are fewer chances of this happening. Many people are under the impression that using a sheet of paper that is large and using a lot of words ensures its safety. This however, is very wrong. The simple promissory note should be uncomplicated and easy to understand. There should be clear details about the borrower and the lender, the amount of the money being transacted, the witnesses and their signatures, the rate of interest being charged and when and how the money has to be returned. The simple promissory note should also contain details about the two parties; the borrower and the lender.
There should also be details about the transaction, the number of installments for the loan to be repaid, payment details pertaining to the amount of the loan, the benefits, consequences if the conditions are breached and also the governing laws. There should be details about the terms of security as well as information about the consequences the borrower is likely to deal with if the commitment/promise is dishonored by him. These details should be drafted after mutual agreement. If these details are included on the note, it will be easier to facilitate legal action in the event that some discrepancies occur.
