Full Recourse Promissory Note Template for the United Arab Emirates

A Full Recourse Promissory Note is a powerful debt instrument that creates an unconditional promise to pay a specific amount under United Arab Emirates law. Unlike limited recourse arrangements, this document grants you comprehensive recovery rights against the maker's entire asset portfolio if they default on payment obligations.

When do you need this document?

You need a Full Recourse Promissory Note when extending credit in commercial transactions, business loans, or trade finance arrangements where maximum security is essential. This document is particularly valuable in real estate transactions, equipment financing, working capital loans, and inter-company advances where the debt amount justifies comprehensive asset recovery rights. You should also consider using this instrument when dealing with borrowers whose financial stability requires additional security beyond their primary assets, or when structuring complex financing arrangements that demand flexible enforcement options.

Key legal considerations

The document must contain specific elements to be legally enforceable under UAE law, including an unconditional promise to pay, precise payment amount in both words and numbers, clear payment dates, and complete maker identification details. You should carefully draft the full recourse clause to specify your rights to pursue all maker assets, including real property, business assets, and personal property where legally permissible. Interest rate provisions must comply with UAE Islamic finance principles and Central Bank regulations, while any guarantor arrangements require separate documentation with clear liability scope. Consider including acceleration clauses for early payment demands upon default, dispute resolution mechanisms preferably through UAE courts or approved arbitration centers, and currency specifications to avoid exchange rate complications.

Legal requirements in United Arab Emirates

Under UAE Federal Law No. 18 of 1993 (Commercial Transactions Law), your promissory note must be dated, contain the words "Promissory Note" in the document, specify an unconditional payment promise, include exact payment amounts and due dates, and identify the place of payment. The maker must have legal capacity under UAE Civil Transactions Law, with corporate makers requiring proper authorization through board resolutions or power of attorney documentation. You must ensure the document complies with UAE Central Bank regulations for negotiable instruments, particularly regarding endorsement and transfer procedures if you plan to negotiate the note. The execution requires proper witnessing according to UAE notarization standards, especially for high-value transactions or when involving real estate security. All foreign currency amounts must comply with UAE exchange control regulations, and any Islamic finance compliance requirements must be addressed if dealing with Sharia-compliant institutions.