Lump Sum Promissory Note for the United Kingdom

Lump Sum Promissory Note Template for England and Wales

A Lump Sum Promissory Note is a formal written promise to pay a specified sum of money at a predetermined date. Under English and Welsh law, it serves as a legally binding document that creates a clear obligation for payment, combining elements of both contract law and negotiable instruments law. The document must meet specific statutory requirements under the Bills of Exchange Act 1882 and related legislation to be enforceable.

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What is a Lump Sum Promissory Note?

A Lump Sum Promissory Note is commonly used in England and Wales when one party needs to formally document a promise to pay another party a specific amount of money at a future date. This document is particularly useful in business transactions, loans, and debt restructuring situations where a clear, enforceable promise of payment is required. The note must contain an unconditional promise to pay, a specified sum, and a defined payment date to be valid under English law. It offers creditors a straightforward mechanism for enforcing payment obligations and can be used as evidence of debt in legal proceedings.

What sections should be included in a Lump Sum Promissory Note?

1. Date: Date of execution of the promissory note

2. Parties: Details of maker (promisor) and payee (promisee)

3. Promise to Pay: Unconditional promise to pay a specific sum

4. Payment Amount: Specified lump sum amount in clearly stated currency

5. Payment Date: Specific date when payment is due

6. Signature Block: Maker's signature and execution details

What sections are optional to include in a Lump Sum Promissory Note?

1. Interest Rate: Terms of interest calculation and payment conditions if applicable to the promissory note

2. Security: Details of any security or collateral provided to secure the promissory note

3. Default Provisions: Terms specifying the consequences of non-payment and default remedies

4. Prepayment Terms: Conditions under which early payment is permitted and any associated penalties or benefits

What schedules should be included in a Lump Sum Promissory Note?

1. Schedule 1 - Payment Schedule: Optional schedule detailing any permitted installment payments before the final due date

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

3. Schedule 3 - Guarantor Information: Details of any guarantors and the terms of their guarantee, if applicable

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

England and Wales

Publisher

Genie AI

Document Type

Promissory Note

Sector

Banking

Cost

Free to use
Industries

Bills of Exchange Act 1882: Primary legislation defining promissory notes and their requirements, setting out the legal framework for negotiable instruments

Law of Property Act 1925: Governs requirements for written instruments and any security interests that may be involved in the promissory note

Limitation Act 1980: Establishes limitation periods for enforcing the note, specifically 6 years for simple contracts

Consumer Credit Act 1974: Regulatory requirements for consumer credit if the promissory note involves a consumer transaction

Contract Law Principles: Common law fundamentals including offer, acceptance, consideration, intention to create legal relations, and capacity to contract

Doctrine of Consideration: Common law principle ensuring valid consideration exists for the promise to pay

Financial Services and Markets Act 2000: Regulatory framework applicable if the note falls within regulated financial activities

Money Laundering Regulations 2017: Anti-money laundering requirements that may be applicable to the transaction

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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