What Will a Promissory Note Typically Contain?

My company will be loaning some money to a third party. What should I make sure to include in the promissory note?

A promissory note is intended to be a legal contractual obligation obligating the borrower to pay back a loan. The key terms of promissory notes are:

1. The amount of the loan
2. The amount of the interest rate
3. When interest and principal are payable
4. Where payments are to be sent
5. The late fee if payment is not made on time
6. Whether the note is secured by any assets of the borrower
7. Whether the note is guaranteed by another person or entity
8. That the maturity date of the loan can be accelerated if the borrower has not made timely payments or otherwise breached the terms of the note
9. That the borrower is liable for attorneys' fees and costs if you have to sue to recover under the note
10. What law governs and where legal actions can be started if the borrower defaults

Click here for a sample Promissory Note payable on demand, or here for a sample Promissory Note payable on a designated future date. Both promissory notes are drafted to be protective of the lender.

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