What is a promissory note?

A promissory note is a legally binding document that serves as evidence of a loan or other debt agreement between two parties, the lender and the borrower. In Pennsylvania, the promissory note must contain the amount of money borrowed, the date of the loan, the interest rate, the maturity date, and the method of payment. It must also be signed by both parties. In some cases, a promissory note may be secured by collateral, such as real estate, a car, or money from an account. Promissory notes are commonly used by individuals to make loans to family members or friends. Businesses may also use promissory notes when seeking loans from banks or other financial institutions. When used in business, the promissory note may include covenants and other legal requirements in order to protect both the lender and the borrower. In Pennsylvania, all promissory notes must be prepared in accordance with state law. Violation of the requirements of the notes can lead to legal action, so it is important to understand the terms of the promissory note and seek legal advice if necessary. Additionally, lenders may require that a promissory note be notarized.

Related FAQs

What is a contract of adhesion?
What is the principle of non-derogation of contracts?
What is an assignment of a contract?
What is a void contract?
What is implied in a contract?
What is the interpretation of a contract?
What is the common law of contracts?
What is anticipatory repudiation?
What is a creditors’ rights clause?
What is the formalities requirement?

What is a promissory note?

Related FAQs

Related Blog Posts