Recourse Promissory Note for the United Kingdom

Recourse Promissory Note Template for England and Wales

A Recourse Promissory Note under English and Welsh law is a legally binding written instrument containing an unconditional promise to pay a specific sum of money to a named recipient. It includes detailed payment terms, interest rates, and conditions for enforcement. The 'recourse' element means that if the maker defaults, the holder can pursue the maker personally for full payment. This document is governed by the Bills of Exchange Act 1882 and related English legislation, providing strong legal protection for the payee.

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What is a Recourse Promissory Note?

A Recourse Promissory Note is commonly used in England and Wales when there is a need to formalize a debt obligation with strong enforcement rights. This document type is particularly useful in situations requiring documented proof of debt with personal liability. The note includes specific payment terms, interest rates, and enforcement provisions, providing security for the payee while clearly outlining the maker's obligations. The recourse nature ensures that the payee can pursue the maker's personal assets if payment defaults occur. This instrument is governed by English law, particularly the Bills of Exchange Act 1882, making it a robust and widely recognized form of debt instrument.

What sections should be included in a Recourse Promissory Note?

1. Promise to Pay: Unconditional promise to pay a specific sum, including amount, currency, and payment details

2. Payment Terms: Detailed terms including amount, currency, interest rate, and payment schedule

3. Date of Issue: Date when the note becomes effective and duration of the note

4. Maker Details: Full legal name and address of the person/entity making the promise to pay

5. Payee Details: Full legal name and address of the person/entity receiving payment

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

1. Security Provisions: Details of any collateral or security arrangements backing the note

2. Acceleration Clause: Provisions allowing payee to demand full payment upon specified default events

3. Assignment Rights: Terms governing the transfer or assignment of the note to third parties

4. Prepayment Terms: Conditions and terms for early repayment of the note

What schedules should be included in a Recourse Promissory Note?

1. Payment Schedule: Detailed breakdown of payment dates, amounts, and interest calculations

2. Security Details: Comprehensive description of any collateral or assets securing the note

3. Guarantee Agreement: Terms of any third-party guarantee securing the note

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: Fundamental legislation governing negotiable instruments in the UK, defining promissory notes, their essential requirements, and rules for negotiation and enforcement

Law of Property Act 1925: Legislation relevant for cases where security interests are involved in the promissory note

Consumer Credit Act 1974: Applies to consumer transactions, containing specific requirements for the form and content of credit agreements

Limitation Act 1980: Sets statutory limitation periods for enforcement of the note, specifically 6 years for simple contracts

Contracts (Rights of Third Parties) Act 1999: Governs assignability and third-party rights in relation to the promissory note

Unfair Contract Terms Act 1977: Applicable when dealing with consumers or standard form contracts, regulating unfair terms

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

Doctrine of Incorporation: Common law principle requiring that all terms must be clearly incorporated into the note

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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