Promissory Notes: What Makes Them Enforceable
The written promise to repay — and the terms that make it hold up.
What is a promissory note?
A promissory note is a written promise by one party to pay a definite sum of money to another, on demand or by a set date. It is the core document behind most loans — from a bank financing to a loan between a business and its owner — and, done right, it is directly enforceable.
What makes it enforceable
A strong promissory note clearly identifies the parties, the principal amount, the interest rate, the repayment schedule, and what happens on default. It should be signed, and for larger or secured loans it is often paired with collateral or a personal guaranty. Vague or missing terms are what create collection problems.
Collecting on a promissory note
When a borrower defaults, the holder can demand payment and, if necessary, sue on the note — often a relatively straightforward claim because the obligation is in writing. Keeping the original note and clear records is important, and a demand frequently prompts payment before suit.
How Nochumson P.C. helps
Nochumson P.C. drafts enforceable promissory notes and collects on defaulted ones for businesses and lenders. Contact us about a promissory note.
Related articles:
- Personal Guaranties in Business Loans & Leases
- Breach of Contract: Remedies in Pennsylvania
- Cease-and-Desist Letters: When & How
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