A promissory note is like a cheque in that it can be endorsed onwards by the noteholder, in which case the debt is transferred along with the note.
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A Promissory Note is a negotiable instrument issued by you, or from you, for the promise to pay a sum of money. It is relatively simple in comparison with the more complex loan agreements, and for that reason, may be a good option to consider as a paper trail that money is owed to you or payable by you. As a simple document, it is a good way for you to create a paper trail of a payment or loan of smaller sum.
If the Promissory Note contains complex clauses, it may be deemed to be a complex financial instrument and be regulated by the Corporations Act 2001 (Cth). It will be important at that time to seek the assistance of a lawyer.
Use this Promissory Note if:
- You would like to document that a sum is owed to you; or
- You would like to document that a sum is payable by you.
What does the Promissory Note cover?
- Payee and Issuer Details;
- Interest Details;
- Transferability; and
- Payable Details.
Other names for Promissory Note include:
- Payment on Demand; and
- Payment on Arrival.
From the Knowledge Base
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