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A Promissory Note is a vital part of many transactions between two entities. The definition of a Promissory Note is a written contract in which one party promises to pay a sum of money to another party. For example, if a person buys an item and both parties agree that the money transfer will occur at a later date, a promissory note is written up to make the agreement a legal and binding contract.
The basics of a Promissory Note are the amount due and the due date. Additionally, an interest rate can be included in the Promissory Note that adds interest charges at a specified level to the amount of money owed. For this reason, Promissory Notes are commonly used when one individual is loaning money to another individual.
If you use a Promissory Note, make sure the terms of the agreement are clearly laid out. Any ambiguity in a Promissory Note could make it hard to collect payment. With that in mind, specify the amount, the due date and any interest charges. Also don't forget to have both parties sign the Promissory Note. Without the signatures, the Promissory Note will usually not be able to hold up in a court of law.
If you are looking for a Promissory Note form that includes everything you need, you can find it on RocketLawyer.com.