Checklist Items to Consider for Drafting a Promissory Note

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Document Title

Checklist Items to Consider for Drafting a Promissory Note

Date of Checklist Completion

Date: {{date}}

Section 1: Parties to the Promissory Note

1.1. **Maker (Borrower) Identification:** Full legal name of the individual or entity indebted. {{maker_full_legal_name}}, {{maker_registration_number}} (if applicable), {{maker_address}}.

1.2. **Payee (Lender) Identification:** Full legal name of the individual or entity to whom the debt is owed. {{payee_full_legal_name}}, {{payee_registration_number}} (if applicable), {{payee_address}}.

Section 2: Principal Sum and Interest

2.1. **Principal Amount:** Clearly state the exact amount of money borrowed. {{principal_amount}} (in words: {{principal_amount_words}}).

2.2. **Interest Rate:** Specify if interest will be charged. If yes, state the annual interest rate (e.g., fixed or variable, and how it's calculated). {{interest_rate}}% per annum.

2.3. **Interest Calculation Method:** Describe how interest will be accrued (e.g., simple, compound, daily, monthly). {{interest_calculation_method}}.

2.4. **Default Interest Rate:** Outline the interest rate applicable in case of default on payments. {{default_interest_rate}}% per annum.

Section 3: Repayment Terms

3.1. **Repayment Schedule:** Detail how and when the principal and interest will be repaid (e.g., lump sum on a specific date, installments, demand). {{repayment_schedule}}.

3.2. **Due Date(s):** Specify all payment due dates. {{first_payment_due_date}}, {{subsequent_payment_dates}}.

3.3. **Payment Method:** How payments should be made (e.g., bank transfer, cheque). {{payment_method}}, to account number: {{payee_bank_account_number}}.

3.4. **Prepayment:** Indicate if the maker can prepay the loan without penalty. If so, clearly state the terms. {{prepayment_terms}}.

Section 4: Default and Remedies

4.1. **Events of Default:** Define what constitutes a default (e.g., failure to pay on time, bankruptcy). {{events_of_default}}.

4.2. **Notice of Default:** Specify if and how notice of default will be given. {{notice_of_default_period}} days.

4.3. **Remedies for Default:** Outline the payee's rights and remedies upon default (e.g., acceleration of the entire debt, collection costs). {{remedies_for_default}}.

Section 5: Governing Law and Jurisdiction

5.1. **Governing Law:** Specify the laws of which country or province will govern the promissory note. {{governing_law_jurisdiction}}.

5.2. **Jurisdiction:** Identify the courts that will have jurisdiction over any disputes arising from the note. {{court_jurisdiction}}.

Section 6: General Provisions

6.1. **Waiver:** Include clauses regarding waivers of rights.

6.2. **Severability:** State that if any part of the note is deemed unenforceable, the rest remains valid.

6.3. **Amendments:** How any amendments to the note must be made (e.g., in writing, signed by both parties).

Section 7: Guarantor (If Applicable)

7.1. **Guarantor Identification:** Full legal name of any individuals or entities guaranteeing the loan. {{guarantor_full_legal_name}}, {{guarantor_id_number_or_registration_number}}, {{guarantor_address}}.

7.2. **Extent of Guarantee:** Clearly define the guarantor's obligations. {{extent_of_guarantee}}.

Section 8: Signature Block

IN WITNESS WHEREOF, the parties have executed this Promissory Note as of the date first above written.

_____________________________

Maker (Borrower) Signature

Printed Name: {{maker_printed_name}}

ID/Registration No.: {{maker_id_or_registration_number}}

_____________________________

Payee (Lender) Signature

Printed Name: {{payee_printed_name}}

ID/Registration No.: {{payee_id_or_registration_number}}

_____________________________

Guarantor Signature (if applicable)

Printed Name: {{guarantor_printed_name}}

ID/Registration No.: {{guarantor_id_or_registration_number}}

Witness Signature:

_____________________________

Printed Name: {{witness_printed_name}}

Date: {{witness_date}}