Lender Promissory Note for United Arab Emirates

Lender Promissory Note Template for United Arab Emirates

A Lender Promissory Note under UAE law is a formal financial instrument that contains an unconditional written promise by one party (the maker) to pay a specific sum of money to another party (the payee/lender) at a determined future date or on demand. The document must comply with the UAE Commercial Code (Federal Law No. 18 of 1993) and related banking regulations, including specific requirements for format, content, and execution. It serves as a legally binding document that can be used for expedited enforcement proceedings in UAE courts and may be structured to comply with both conventional and Islamic banking principles.

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What is a Lender Promissory Note?

The Lender Promissory Note is a crucial financial instrument in UAE banking and commercial transactions, governed by the UAE Commercial Code and related banking regulations. This document type is commonly used in various lending arrangements, from simple bilateral loans to complex financing structures, where a formal acknowledgment of debt and promise to pay is required. The Lender Promissory Note must contain specific elements mandated by UAE law to be enforceable, including the unconditional promise to pay, specified amount, payment date, and proper execution requirements. It can be used as a standalone document or in conjunction with other lending documents, providing lenders with an efficient enforcement mechanism through UAE courts. The document can be structured to accommodate both conventional and Islamic financing principles, making it versatile for various financial transactions in the UAE market.

What sections should be included in a Lender Promissory Note?

1. Promissory Note Declaration: Clear statement that this is a promissory note, including the unconditional promise to pay

2. Date and Place of Issuance: Specific date and location where the promissory note is issued, as required by UAE law

3. Parties: Full legal names and details of the maker (promisor) and the payee (lender)

4. Principal Amount: The amount promised to be paid, stated in both numbers and words

5. Payment Terms: Due date, payment schedule, and method of payment

6. Interest Rate: Applicable interest rate (if any) and calculation method

7. Place of Payment: Specific location where payment must be made

8. Governing Law: Statement that UAE law governs the promissory note

9. Signature Block: Space for maker's signature, witness signatures, and any required authentication

What sections are optional to include in a Lender Promissory Note?

1. Security Provisions: Details of any collateral or security backing the promissory note, used when the note is secured

2. Acceleration Clause: Conditions under which the entire amount becomes immediately due, included for additional lender protection

3. Islamic Finance Compliance: Specific provisions ensuring Sharia compliance, required for Islamic banking transactions

4. Cross-Default Provisions: Reference to other obligations and consequences of default, used in complex lending arrangements

5. Assignment Provisions: Terms governing the transfer or assignment of the note, included when transferability is anticipated

What schedules should be included in a Lender Promissory Note?

1. Payment Schedule: Detailed breakdown of payment dates and amounts if installment payments are involved

2. Security Details: Detailed description of any collateral or security provided, including asset specifications

3. Related Agreements: List of any related loan agreements or security documents referenced in the note

4. Calculation Methods: Detailed explanation of interest calculations or other financial computations

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Publisher

Genie AI

Document Type

Promissory Note

Sector

Banking

Cost

Free to use
Relevant Industries

Banking and Financial Services

Real Estate

Commercial Trading

Manufacturing

Construction

Small and Medium Enterprises

Corporate Finance

Islamic Banking

Investment Services

Import/Export

Retail

Professional Services

Relevant Teams

Legal

Finance

Treasury

Credit and Risk

Compliance

Banking Operations

Islamic Banking

Corporate Secretariat

Collections

Commercial Operations

Relevant Roles

Chief Financial Officer

Finance Manager

Legal Counsel

Corporate Lawyer

Credit Manager

Risk Officer

Treasury Manager

Banking Operations Manager

Compliance Officer

Islamic Banking Officer

Commercial Director

Financial Controller

Company Secretary

Loan Officer

Collections Manager

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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