A promissory note is a written promise to pay a debt. An unconditional promise to pay on demand or at a fixed or determined future time a particular sum of money to or to the order of a specified person or to the bearer.
Virginia Checklist — Items to Consider for Drafting a Promissory Note When drafting a promissory note in Virginia, it is essential to consider various key factors to ensure its validity and enforceability. This checklist outlines important items and considerations to include in a well-drafted promissory note: 1. Parties involved: Clearly identify the parties involved in the promissory note, including the lender (creditor) and borrower (debtor). Include their full names, addresses, and contact information. 2. Loan amount and interest rate: State the precise amount of the loan that the borrower will be obligated to repay. Additionally, specify the interest rate or clearly mention if no interest will be charged. 3. Repayment terms: Describe the repayment terms, including the number and frequency of payments, due dates, and the method of payment (such as cash, check, electronic transfer). 4. Late payment terms: Include provisions regarding late fees or penalties for missed or late payments. 5. Collateral: If the loan is secured by collateral, include detailed information about the collateral (such as real estate, vehicles, or business assets) and how it will be used to repay the loan in case of default. 6. Default and acceleration clauses: Clearly define the events of default, such as missed payments or breach of other terms, and explain the consequences, such as acceleration of the entire loan balance and access to collateral. 7. Governing law and jurisdiction: Specify that the promissory note shall be governed by and construed under the laws of the Commonwealth of Virginia. Designate the appropriate county where any legal disputes arising from the note will be resolved. 8. Waiver of defenses: Include a clause that the borrower waives any and all defenses available under applicable law, except for those explicitly retained by statute. 9. Severability: Specify that if any provision of the promissory note is found to be unenforceable, the remaining provisions shall remain in full force and effect. 10. Execution and notarization: Ensure that the promissory note is signed by both parties and dated. Consider having the signature notarized for added authenticity. Different types of Virginia Checklist — Items to Consider for Drafting a Promissory Note may include variations depending on the specific circumstances of the loan. For example, a different checklist may be applicable when the loan is secured by real estate or involves multiple lenders. However, the essential items mentioned above remain fundamental to a well-drafted promissory note in Virginia.
