How does the promissory note work?

When you need a loan, or to cover a buy-sell payment and you don’t have the capital you need, you can resort to a promissory note. When you need a loan, or to cover a buy-sell payment and you don’t have the capital you need, you can resort to a promissory note. Usually, the loan is issued with a payment guarantee on an estimated date, on terms agreed by both parties. We tell you everything you need to know in case you ever need to resort to this mercantile figure. We tell you everything you need to know in case you ever need to resort to this mercantile figure.

What is a promissory note?

It represents a “Promise to pay” made by the signatory of the document. It arises from any type of contract, whether it is a sale or a loan, and has a deadline. The promissory note is used to record the financial details of a given loan. It is a legal contract that can be taken to court in the event of default. It is a legal contract that can be taken to court in the event of default.

How to write a promissory note?

Depending on its formal nature, the promissory note must contain certain information required by Articles 94 and 95 of Law 19/1985, or Check and Stock Exchange Act, known as LCC. Among these points stand out:

  • The denomination of “promissory note” in the text, without it being sufficient that it is used as a security.
  • Includes the promise that payment of a specified amount of money (in words and numbers) will be made.
  • The due date, or the date on which payment is promised. It can be a fixed date, a term from the issue; on sight or at an agreed term from sight.
  • Place of payment, can be the domicile of the signatory, or a bank.
  • Name of lessee.
  • Date and place of signing of the promissory note. If the place is not indicated, the address of the signatory is established.
  • Signature of the issuer of the promissory note; in no case is the name required.

Other legal considerations

The back of the document is reserved for endorsement and mentions. Only where it says “Do not order” or “Not transferable” is third party endorsement prohibited. The back of the document is reserved for mentions and endorsements. If the caption “To be credited to account” is included, payment will be made to the specified account. Payments are made to the specified account. If, in any case, one of the particulars required by the CCA is omitted, the document will not be considered a promissory note from the point of view of the Law; although the promise of payment between the parties can be kept and fulfilled.

What recourse does the lender have?

The promissory note, provided that it contains all the elements required by law, represents a legal contract which can be enforceable in court in the event of a violation of the terms agreed upon by the borrower. The promissory note, provided that it contains all the elements required by law, represents a legal contract which can be enforceable in court in the event of a violation of the terms agreed upon by the borrower. Before filing a claim and initiating legal action, the lender may contact the debtor to seek to enter into a debt settlement agreement. Before filing a claim and initiating legal action, the lender may contact the debtor to seek to enter into a debt settlement agreement. You can also resort to an act of conciliation before the competent court. In the event of absence from the appointment, it will be noted that the debtor intends not to respect the acquired payment commitment. The claim of the proceeds of the debt against the company and its guarantors or endorsers.

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