Promissory Note With Interest for United Arab Emirates

Promissory Note With Interest Template for United Arab Emirates

A Promissory Note with Interest is a formal financial instrument governed by UAE Federal Law No. 18 of 1993 (Commercial Transactions Law) and relevant Central Bank regulations. This document represents a written, unconditional promise by one party (the maker) to pay a specific sum of money to another party (the payee), along with agreed-upon interest, at a specified future date. The document must comply with UAE's dual system of civil law and Sharia principles, particularly regarding interest provisions, and includes essential elements such as payment terms, interest rate declarations, and proper party identification to ensure legal enforceability within the UAE jurisdiction.

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What is a Promissory Note With Interest?

The Promissory Note With Interest is a crucial financial instrument in UAE business and personal transactions, governed by UAE Federal Law No. 18 of 1993 and Central Bank regulations. It serves as a legally binding document evidencing debt obligations and is commonly used in various scenarios including business financing, personal loans, real estate transactions, and commercial dealings. The document must include specific elements to be legally valid: the maker's unconditional promise to pay, the principal amount, interest rate (compliant with UAE regulations), payment terms, and proper identification of all parties. Given the UAE's unique legal framework combining civil law and Sharia principles, special attention must be paid to interest provisions and their compliance with local regulations. The document's formal nature and legal implications make it a significant tool in UAE financial transactions, requiring careful drafting and consideration of all regulatory requirements.

What sections should be included in a Promissory Note With Interest?

1. Promissory Note Details: Basic details including date of issuance, place of issuance, and document title

2. Maker Information: Full legal name, address, and identification details of the person/entity making the promise to pay

3. Payee Information: Full legal name, address, and identification details of the person/entity to whom payment is promised

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

5. Interest Rate Declaration: Clear statement of the agreed interest rate, ensuring compliance with UAE Central Bank regulations

6. Payment Terms: Specific details about when and how the payment(s) will be made, including maturity date

7. Place of Payment: Specific location or bank account details where payment should be made

8. Governing Law: Statement that the note is governed by UAE law

9. Signature Block: Space for maker's signature, with authentication requirements if needed

What sections are optional to include in a Promissory Note With Interest?

1. Guarantor Information: Used when a third party guarantees the payment, including their full details and signature

2. Witness Details: Used when witness attestation is required, particularly for high-value notes

3. Default Provisions: Additional terms specifying consequences of default, used in more complex transactions

4. Transfer Rights: Specific provisions regarding the transferability of the note, if different from standard negotiable instrument rules

5. Security Details: Used when the note is secured by specific assets or collateral

6. Early Payment Provisions: Terms regarding prepayment possibilities and any associated calculations

What schedules should be included in a Promissory Note With Interest?

1. Payment Schedule: If payments are to be made in installments, a detailed schedule of payment dates and amounts

2. Interest Calculation Method: Detailed explanation of how interest is calculated, especially for variable rates or complex payment structures

3. Security Documentation: If the note is secured, details of the security arrangement and related documentation

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

Construction

Manufacturing

Trading and Commerce

Professional Services

Healthcare

Education

Retail

Technology

Hospitality

Import/Export

Small and Medium Enterprises

Relevant Teams

Legal

Finance

Treasury

Credit Control

Risk Management

Compliance

Commercial Operations

Corporate Secretariat

Business Development

Accounts Receivable

Accounts Payable

Relevant Roles

Chief Financial Officer

Finance Manager

Legal Counsel

Corporate Lawyer

Treasury Manager

Credit Manager

Financial Controller

Accounts Manager

Business Development Manager

Risk Manager

Compliance Officer

Commercial Director

Banking Relationship Manager

Contract Administrator

Company Secretary

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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