Make it clear what type of contract you are starting. When lending money, make sure that the phrase “contract” and/or “Promissory Note” appears at the beginning of the document so that there is no argument for the money to be a gift. Start your debt note by identifying the date of signature, your legal name as a lender and the borrower`s legal name, your address and phone number — as well as that of the borrower — and the amount of the loan. You could write z.B: “On January 10, 2013, I, John H. Doe, domiciled at 111 Oak Lane, My Town, My State, telephone number 111-1111-1111, promises the borrowed sum of $10,000 (ten thousand dollars and no cents) plus interest to Jane A. Smith, resident at 555 Drive Walnut, Her Town, Her State, telephone number 555-5555.” There are five important elements to include in a legal document to indicate the money owed: the amount of money owed, who owes the money, to whom the money is owed (and/or why the liability was created), the date on which the debt was created and the date on which it is to be repaid. These elements, as well as evidence of the actual existence of the debt, justify the legal right to recover a debt. Also indicate the exact date on which the loan will be fully paid. This is also the date of the last payment. This is essential to ensure that both parties know when the agreement will be reached. If the loan has not been made on the specified date, both parties should discuss what to do next. Whether you are the lender or the borrower, clear written documentation on important information will give them more confidence.
This article explains everything you need to know about payment agreements. Key components, types of chords at a few stages of the design of a clean document. In the next paragraph, write down all the penalties or fees you charge if the borrower is late to pay. You could write, “If I, John H. Doe, cannot repay the loan until December 31, 2013, I agree to pay an additional penalty of 10% of the loan amount with the initial loan amount.” Enter a few lines and enter signature lines for your name, the name of the borrower and the name of a witness. Leave room under the notary`s signature lines to confirm the signature of the replacement allowance. When most people think of an IOU, I remember the idea of a towel in hand. Due to the presentation of IOUs in Hollywood, it does not have the greatest reputation as a legally binding document.