Promissory Note Payable for Germany

Promissory Note Payable Template for Germany

A Promissory Note Payable under German law (Schuldschein) is a formal written promise to pay a specified sum of money, at a specified time or on demand, to a named recipient. Governed by the German Civil Code (BGB) and the Bill of Exchange Act (Wechselgesetz), this document serves as a legally binding debt instrument that can be used in both commercial and private contexts. It must contain specific elements required by German law, including an unconditional promise to pay, a definite sum, and proper execution by the maker, while conforming to strict formality requirements under German commercial and civil law.

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What is a Promissory Note Payable?

A Promissory Note Payable is commonly used in German business and financial transactions as a debt instrument that provides evidence of and formalizes a loan or credit arrangement. This document type is particularly useful when businesses or individuals need to document debt obligations in a legally binding format. The note, governed by German law, must comply with the formal requirements set forth in the German Civil Code (BGB) and the Bill of Exchange Act (Wechselgesetz). It typically includes essential information such as the amount owed, payment terms, interest rates, and maturity date. The document's primary purpose is to provide a clear, legally enforceable promise of payment while offering protection to both the maker and the payee under German legal framework.

What sections should be included in a Promissory Note Payable?

1. Date and Place of Issuance: Clear statement of when and where the promissory note is issued, essential for validity under German law

2. Parties' Information: Full legal names and addresses of both the maker (promisor) and the payee (promisee)

3. Promise to Pay: Unconditional promise to pay a specific sum of money, including the currency and amount written in both numbers and words

4. Payment Terms: Specific details about when and how the payment will be made, including maturity date and payment location

5. Interest Rate: Clear statement of the applicable interest rate (if any) and how it is calculated

6. Signature Block: Space for the maker's signature, which must comply with German formal requirements

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

1. Transferability Clause: Section specifying whether and how the note can be transferred or assigned to other parties

2. Prepayment Provisions: Terms regarding early payment options and any associated penalties or benefits

3. Default Provisions: Specific consequences and procedures in case of default

4. Governing Law Statement: While German law applies, this section may be included for international transactions to explicitly state the application of German law

5. Security Interest: Description of any collateral or security backing the promise to pay

What schedules should be included in a Promissory Note Payable?

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

2. Collateral Documentation: If security is provided, description and documentation of the collateral (only needed if security interest is included)

3. Interest Calculation Schedule: For complex interest arrangements, a detailed breakdown of interest calculation methods and examples

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

Jurisdiction

Germany

Publisher

Genie AI

Document Type

Promissory Note

Sector

Banking

Cost

Free to use
Relevant Industries

Banking and Financial Services

Real Estate

Manufacturing

Small and Medium Enterprises

Construction

Technology

Retail

Agriculture

Professional Services

Healthcare

Relevant Teams

Legal

Finance

Treasury

Accounting

Credit and Collections

Risk Management

Compliance

Corporate Secretariat

Business Development

Commercial

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Financial Controller

Legal Counsel

Corporate Lawyer

Credit Manager

Accounts Receivable Manager

Business Development Manager

Risk Manager

Company Secretary

Managing Director

Finance Manager

Loan Officer

Compliance Officer

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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