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What is a promissory note? According to the law, it is acknowledged as a legally valid "IOU" or a note of hand.
Binding, contractual and co-signed, a p.n. offers fair and lawful dealings between two or more parties. It is subject to the provisions of statutory law, and is enforceable. Remember that there are many types of notes. Legalized in most states of America, you are within the law to duly date and sign a legal note providing you are of lawful age. Legal notes provide a justifiable covenant and protection when entering into a contract. The evidence of a handshake does not constitute a legit record in the eyes of the law.
Commitment & Obligation
Chartered accountants highlight the importance of paperwork. Your lawyer is justified in charging you a fee for drafting a legal precedent due to serious legality and contract stipulation as prescribed under law. When you make a pledge or pact in the form of a legal note, you are rightfully protected providing the arrangement is completely legitimate and on the up and up. Your legal rights are sanctioned by law, that is, when the paper note you sign provides a promise and proof of your honest intent. The document is your personal guarantee that you will stay true
to the agreement or you may face liability in a court of law.
Contract Covenant & Time Payment
Notes can be likened to a bond of understanding between two entities. Failing to abide by your legal obligation, and you could find yourself facing judicial proceedings. Or, worse, come before a federal court judge.
As sponsor, a paper note should be duly dated, signed, and independently witnessed or notarized by someone other than a friend, family member or close relative. The terms should be spelled out clearly. It is wise to ensure proper legal procedure is noted, and any special legal provisions and clauses are inserted in the P/N.
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Avoiding Costly Mistakes
How Promissory Notes Work
Important Facts & The Law
Secured & Unsecured Notes
History Of The Promissory Note
Legal juridical transactions are often expensive and time consuming. Ask yourself: Is this legal note I am about to sign warranted? The deal may be handled more wisely through consultation with a local attorney. A time note patron, backer or underwriter may require addition security in the form of a pledge. Demand for note that is "secured" normally requires a "Security Agreement" securing the actual note.
Alliance & Legal TransactionSource: www.promissory-note.org